According to Say's law, a lack of demand

Question

Quizplus · Accepted Answer

Say's law suggests that supply creates its own demand and that a lack of demand in one industry will be balanced by increased demand in another industry. This implies that a lack of demand may occur briefly in one industry until capital moves to another industry to create products that consumers demand. Therefore, choice (A) is the best answer. Choice (B) is incorrect because Say's law does not guarantee that demand will never be lacking, as there can be temporary imbalances in the market. Choice (C) is partially correct, but incomplete, as it explains why there may be insufficient demand, but not how it can be addressed. Choice (D) is incorrect because hoarding money is not a significant factor in the context of Say's law.

According to Say's Law, a Lack of Demand