Aggregate demand is not a quantity, it&#x27;s a relationship between output and price level. But anyway, following your story, you get reduced employment.<p>But you don&#x27;t get <i>involuntary</i> unemployment - people employed at a price $P as well as people unemployed but willing to accept work at the same price. All your story gives us is that there is a new market clearing price for labor at a lower price level, e.g. $P2 &lt; $P. Fewer people are willing to accept labor at $P2, so they <i>voluntarily</i> go without work.<p>This is pretty much just basic supply&amp;demand. You don&#x27;t even need to go as far as Keynesian theory to get this out. If this is Varoufakis&#x27; story, it&#x27;s hardly clear why he is criticizing classical econ 101 at all.