Question

49. The concept that there could never be a general glut of commodities throughout an economy dominated conventional macroeconomic thinking until the Great Depression of the 1930s. This concept is known as: a. Malthus’s theory of population. b. Say’s Law of Markets. c. David Hume and John Locke’s quantity theory of money. d. Alfred Marshall’s partial equilibrium analysis. e. Aristotle’s diamond-water paradox.

Answer 1

Solution-

The concept that there could never be a general glut of commodities throughout an economy dominated conventional macroeconomic thinking until the Great Depression of the 1930s. This concept is known as: Say’s Law of Markets.

The correct option is B. Say’s Law of Markets.

Reason-

Say's Law of markets, this became orthodoxy in political economics until the Great Depression. Say argued that there could never be a general deficiency of demand or a general glut of commodities in the whole economy.

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