According to the classical economists an economy producing $8 trillion in goods and services Option A could experience a permanent glut if no one has estimated the demand for goods and services in the economy. Option B simultaneously generates the income necessary to purchase $8 trillion in goods and services. Option C may be producing too much since the needs of people may not be this great. Option D is supplying $8 trillion in goods and services, but could be demanding more or less than $8 trillion in goods and services for a very long period of time.
Added by Chad B.
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Step 1: Identify the classical economists’ view: Say's Law—production creates the income needed to purchase the output, so aggregate supply inherently generates its own demand. Show more…
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