Question

What is Keynes’ law?

Short answer

Keynes’ law states that demand creates its own supply.

Step-by-step solution

Concept introduction

Aggregate demand is the total demand for all commodities by various entities in an economy.

Explanation

Keynes’ law was based on the short-run perception of consumers who demand the products in the economy. As the economy's need grows, so will the supply of goods, and it will be advantageous for manufacturers to offer items in response to the rising demand. Any aggregate demand would have an impact on price levels and output.