"Supply creates its own demand" is known as
A) Smith's law.
B) Say's law.
C) the circular flow.
D) the Ricardian dilemma.

Question

Quizplus · Accepted Answer

"Supply creates its own demand" is known as Say's law, named after economist Jean-Baptiste Say. According to Say's law, production of goods and services generates income that allows people to purchase other goods and services, and thus, supply creates its own demand. This is in contrast to the idea of a shortage in demand causing economic downturns, as proposed by John Maynard Keynes.

"Supply Creates Its Own Demand" Is Known as