Map of Nanteuil-le-Haudouin on In other words, every dollar of production generates a dollar of income to someone in the economy. Thus, there is always sufficient income created to buy whatever output is produced in a market economy. This is essentially true. But even some classical economists, for example, Malthus, were skeptical that Say's Law always ensured full employment. Does a dollar of income generated in some time period always result in a dollar of spending in that time period? Do not households and firms save a part of their income? Will not the leakage of saving out of the economy's income-expenditure stream imply that a dollar of production and income need not generate a dollar of effective demand, that is, spending in the marketplace? And if so, excess production and unemployment would result, certainly in the short run.
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Map Of Nanteuil-Le-Haudouin
The classical school had two basic answers to the questions noted above. First, classical economists argued that both saving and business investment are largely determined by the INTEREST RATE and that changes in the interest rate will prevent any major deficiency in total spending (aggregate demand) in the economy. Map of Nanteuil-le-Haudouin 2016.
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