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John Maynard Keynes is associated with a law summarized in shorthand as which statement?
ASupply creates its own demand
BGovernment budgets must always balance
CDemand creates its own supply
DPrices are fixed regardless of costs
Answer & Solution
Correct answer: C. Demand creates its own supply
1. Keynes' law is named for the economist John Maynard Keynes, who wrote during the Great Depression.
2. The law is shorthand for the idea that the level of total demand drives how much the economy actually produces.
3. In this view, demand is the driver and supply follows along, the reverse of Say's law.
4. Option A states Say's law instead, which is the opposing view.
_Source: OpenStax Principles of Macroeconomics for AP Courses (CC BY 4.0), Ch 10 "The Aggregate Demand/Aggregate Supply Model", section 10.1 | Macroeconomic Perspectives on Demand and Supply_
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