Say's Law
A) is valid only in a simple economy without financial markets
B) led economists during the 1920s to encourage the government to adopt flawed economic policies that led to the Great Depression
C) assures us that in the aggregate,firms are able to sell their output so that full employment can be sustained
D) tells us that in the long run,markets clear
E) tell us that firms must carefully monitor consumer spending and saving in order not to produce more than consumers are willing to purchase

Question

Quizplus · Accepted Answer

Say's Law states that production creates its own demand and in the aggregate, firms are able to sell their output so that full employment can be sustained. It does not necessarily imply that markets clear in the long run or that firms must monitor consumer spending and saving. It also did not lead to flawed policies that caused the Great Depression.