According to Say's law, there cannot be overproduction of goods and services because:
A) planned aggregate expenditures sometimes fall short of total output.
B) prices and wages are "sticky" or inflexible in the downward direction.
C) demand creates its own supply.
D) supply creates its own demand.

Question

Quizplus · Accepted Answer

Say's law states that supply creates its own demand, meaning that the production of goods and services generates income and purchasing power, which in turn creates demand for other goods and services. Therefore, according to Say's law, there cannot be overproduction of goods and services as long as the market is allowed to function freely without government intervention or external shocks.

According to Say's Law, There Cannot Be Overproduction of Goods