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

Determination of l in the cross model, Determination of L in the cross mode...

Determination of L in the cross model As firms will produce less than Y OPT , they require less labor than L OPT . We can determine exactly how much L they need in order to pro

OPEN-MARKET MACROECONOMICS, Macroeconomics: Question 1 and 2 relate to cont...

Macroeconomics: Question 1 and 2 relate to content and skills covered --- OPEN-MARKET MACROECONOMICS: BASIC CONCEPTS , International Trade and Exchange Rates Question 3 relates to

Calculating size of labor force, What is the size of the labor force if the...

What is the size of the labor force if the unemployment rate is 6%, the population is 300 million, and the number unemployed is 6 million

World trade organization is a successor organization, The World Trade Organ...

The World Trade Organization is a successor organization to the A.United Nations. B.World Bank. C.International Court of Justice. D. GATT.

Compute the gain and directivity of the antenna, An antenna in free-space d...

An antenna in free-space driven by current Io radiates far-field E as: for 0 ≤ Φ ≤ π, here C = constant = 0 everywhere else a) Compute the power density, b) Compute t

Meaning of convex indifference curves, Explain what convex indifference cur...

Explain what convex indifference curves means in terms of marginal utility. What properties must a utility function have in order to obtain convex indifference curves?

Aggregate supply and the as curve, Aggregate supply and the AS curve ...

Aggregate supply and the AS curve The AS curve is the aggregate supply as a function of P. It is horizontal when thesupply is low and upward sloping when the s

Serve on an environmental policy, Suppose you serve on an environmental pol...

Suppose you serve on an environmental policy planning board for the federal government. Your task is to propose a policy initiative aimed at reducing urban air pollution, using the

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