Question

Say’s Law says -That markets are self-correcting -That demand creates supply -That at the aggregate level, there will never be a shortage of demand for the goods people produce to sell - That no matter how much government policy may try to encourage private investment during a recession, private agents worried about liquidity will not invest enough to secure full employment Is answer C? " That at the aggregate level, there will never be a shortage of demand for the goods people produce to sell"

Answer 1

Yes, its C.

Says law says that supply creates its own demand. that mean when we produce all the agents of production i.e. labor, capital, land and enterprise all get some thing in return, the labor gets wage and land get rent and so on. these income is used by the agents of production to create extra demand in the market. so, the more we produce ,the more they earn and more demand they create. all they save is again comes back in form of investment so there is no leakage. supply creates its own demand.

answered by: anonymous