Economists who believe that fiscal policy can be effective in smoothing business cycles also believe strongly in the idea that "supply creates its own demand."

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The statement "supply creates its own demand" is a central idea of classical economics, which argues that the economy will always operate at full employment if left alone. In contrast, Keynesian economists who believe in using fiscal policy to smooth business cycles reject the idea of supply creating its own demand, arguing that there can be periods of insufficient aggregate demand, which can lead to unemployment and economic stagnation.

Economists Who Believe That Fiscal Policy Can Be Effective in Smoothing