9. 1.1 Say's law Jean baptiste Say( 1767-1832)is a French economist Supply creates its own demand. That means the economy could never suffer from underemployment or succumb to Thomas' fear of under-consumption. Total spending(demand) would always be sufficient to justify production at full employment(supply)
9.1.1 Say’s law Jean Baptiste Say (1767-1832) is a French economist. “Supply creates its o s its own demand.” That means the economy could never suffer from underemployment or succumb to Thomas’ fear of under-consumption. Total spending (demand) would always be sufficient to justify production at full employment(supply)
1.2 Classical interest theory >The overall level of interest rates was determined by the supply of and demand for ads anable jund >Classical economists recognize that saving and investment are the two main factors, in the long run, which underlie the supply of and demand for loanable funds
9.1.2 Classical interest theory ØThe overall level of interest rates was determined by the supply of and demand for loanable funds. ØClassical economists recognize that saving and investment are the two main factors, in the long run, which underlie the supply of and demand for loanable funds
According to classical economics, saving is afunction of the rate of interest. The higher the rate of interest, the more money will be saved. Investment is also a function of the rate of interest, it will increases as the rate of interest declines
According to ording to classical economics, saving is a function of the rate of interest. The higher the rate of interest, the more money will be saved. Investment is also a function of the rate of interest, it will increases as th s as the rate of interest declines
OThe relationship between interest rate and sM吧 OThe relationship between interest rate and investment。 What is equilibrium interest rate
qThe relationship relationship between between interest interest rate and saving. qThe relationship relationship between between interest interest rate and investment. What is equilibrium interest rate?
Interest rateInvestment Saving Equilibrium rate Below Equilibrium rate Saving investment Classical interest theory
Interest rate Equilibrium rate Below Equilibrium rate Investment Saving Saving, investment ________________________ Classical interest theory