Read the economic article and answer two questions

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Economics

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WHY YOUR GRANDFATHER’S ECONOMICS WAS BETTER THAN YOURS: ON THE CATASTROPHIC DISAPPEARANCE OF SAY’S LAW

https://mises.org/system/tdf/qjae13_4_1.pdf?file=1...

questions:

1.State the key proposition of Say’s Law. What insight does it contain regarding the nature of human cooperation under a system of division of labor?

2.Using the insight provided by Say’s Law, explain the consequences of a significant distortion of the structure of production relative to consumer preferences. How does the initial crisis or cluster of errors snowball into a recession?

Nots: Must according to this article to answer questions! can not just find other sources to answer it. It's the essential requirement. Thank you

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Explanation & Answer

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Running Head: THE INSIGHTS OF THE LAW OF SAY

The Insights of the Law of Say
Student’s Name
Institutional Affiliation

1

THE INSIGHTS OF THE LAW OF SAY

2

The Insights of the Law of Say
Question One
What Is the Key Proposition of Say’s Law
The key proposition of Say’s Law is that supply is the main constituent of demand. The
total demand is not fully dependent on the total number of produce; however, it relates to
production. The purchasing power of a community is not made up of its value added.
Nevertheless, the average demand can only rise when the price of goods and services generated
is greater than the cost ...


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