According to Say's law,in a money economy a reduction in consumption spending causes a __________ shift of the saving curve and therefore a __________ in the interest rate.

Question

Quizplus · Accepted Answer

Say's Law suggests that supply creates its own demand. In a money economy, if consumption spending decreases, it implies an increase in savings. This would shift the saving curve rightward, leading to an excess supply of loanable funds, which would then cause the interest rate to fall.

According to Say's Law,in a Money Economy a Reduction in Consumption