The two cornerstones of Classical economics are the Quantity Theory and
A) Liquidity Preference Theory.
B) disequilibrium analysis.
C) Say's Law.
D) the Phillips Curve.

Question

Quizplus · Accepted Answer

Say's Law, named after French economist Jean-Baptiste Say, states that supply creates its own demand. This means that the production of goods and services will generate enough income to allow consumers to purchase them. Classical economists believed that the economy would always tend towards full employment equilibrium due to Say's Law. The Quantity Theory, which explains the relationship between money supply and inflation, is also a cornerstone of classical economics, but it is not a choice in the options given.

The Two Cornerstones of Classical Economics Are the Quantity Theory