Say's Law is consistent with the _______ view of the economy.

Question

Quizplus · Accepted Answer

Say's Law is a fundamental principle of classical economics and is based on the assumptions of a free-market economy where resources are allocated efficiently through the mechanism of prices and market forces. It implies that the production of goods generates an equal amount of income that can be used to purchase other goods, and thus, supply creates its own demand. This view contrasts with the Keynesian notion of aggregate demand being a driver of economic growth and employment. Monetarism and supply-side economics both draw on classical principles, but Say's Law is closely associated with classical economics.

Say's Law Is Consistent with the _______ View of the Economy