Explain reversed say''s law, Macroeconomics

Assignment Help:

Q. Explain Reversed Say's Law?

In the cross model, supply should instead follow demand. Cross model not only rejects Say's Law, it turns it entirely upside down. In the cross model 'demand creates its own supply'. 

Just as Say's Law is criticized by many economists, there is criticism of this reversed form of Say's Law. Firms passively produce exactly what consumers want. If there is an increase in demand, firms would just produce this extra quantity. Motivation for this behaviour by the firms is further analysed when we describe the labor market in the cross model.


Related Discussions:- Explain reversed say''s law

Macroeconomic Analysis, Derive the conditions for steady state in the Solow...

Derive the conditions for steady state in the Solow model. What are its implications? In what respects is the golden rule different from the steady state?

Financial crisis, how adverse selection has an impact on financial crisis

how adverse selection has an impact on financial crisis

The micro-finance institutions in india, Have the micro-finance institution...

Have the micro-finance institutions failed in their objectives?

GDP, BENEFITS OF GDP

BENEFITS OF GDP

Price elasticity, Price 10,9,8,7,6,5,4,3,2,1 QD 0,1,2,3,4,5,6,7,8,9,10 TR? ...

Price 10,9,8,7,6,5,4,3,2,1 QD 0,1,2,3,4,5,6,7,8,9,10 TR? Ed?.

Uniform series of payments, Your project has an estimated cost for land rec...

Your project has an estimated cost for land reclamation to be realized at the end of 20 years from today for $70,000,000. If current bond long-term interest rates are 7% compounded

Explain why interest rates are pro-cyclical, Critically explain why interes...

Critically explain why interest rates are pro-cyclical, using the supply and demand for bonds framework.

Relate overnight interest rates with interest rates, Relate overnight inte...

Relate overnight interest rates with interest rates By controlling overnight interest rates, the central bank will affect the interest rates with longer maturity. The reason f

Explain between perfect competition and monopoly market, "No point is bette...

"No point is better accepted than the fact that the monopoly price is higher and the output smaller than what is socially ideal. The public is the victim." (a) Explain between

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd