As long as the loanable funds market clears,Say's law holds..

Question

Quizplus · Accepted Answer

Say's law states that production creates its own demand, meaning that supply creates its own demand through the income earned by producing goods and services. In a loanable funds market, savers supply funds which are borrowed by investors to finance their projects, and the interest rate makes sure that supply equals demand. As long as the loanable funds market clears, there is no general overproduction or underconsumption problem, suggesting that Say's law holds.

As Long as the Loanable Funds Market Clears,Say's Law Holds