Question : Say's Law states that:
Option 1: Supply creates its own demand
Option 2: Demand creates its own supply
Option 3: Saving creates investment
Option 4: Investment creates saving
Correct Answer: Supply creates its own demand
Solution : The correct answer is (a) Supply creates its own demand
Say's Law, named after the French economist Jean-Baptiste Say, posits that the production and supply of goods and services in an economy generate enough income and purchasing power to ensure that all goods produced are eventually bought and consumed. According to this principle, the act of supplying goods creates the necessary demand for those goods.
In other words, the production and sale of goods and services generate income for workers, which enables them to purchase other goods and services. This circular flow of income ensures that the supply of goods creates its own demand.
Say's Law challenges the idea that there can be a general overproduction or oversupply of goods in an economy. It suggests that as long as resources are allocated efficiently and markets are allowed to function freely, supply will naturally create sufficient demand for all produced goods.
Question : Which law states that with constant taste and preference, the proportion of income spent on food stuff diminishes as income increases?
Option 1: Say's Law
Option 2: Griffin's Law
Option 3: Gresham's Law
Option 4: Engel's Law
Question : Which law states that bad money drives good money out of circulation?
Option 1: Wagner's law
Option 2: Grimm's law
Option 3: Gresham's law
Option 4: Keynes' law
Question : Law of Demand states that there is a negative relationship between ______.
Option 1: demand for a commodity and its supply
Option 2: demand for a commodity and its price
Option 3: tax on a commodity and its price
Option 4: supply of a commodity and its price
Question : If a consumer's demand for a good moves in the same direction as the consumer's income, the consumer's demand for that good must be inversely related to the price of the good, which is called _____.
Option 1: law of demand
Option 2: law of supply
Option 3: law of substitute
Option 4: law of optimal choice
Question : Which law of economics states, "Bad money drives out good money"?
Option 1: Baxter's Law
Option 2: Ohm's Law
Option 4: Gauss's Law
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