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Strategies & Market Trends : ahhaha's ahs

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To: ahhaha who wrote (24158)	12/6/2013 12:17:44 PM
From: ahhaha	Read Replies (1) of 24758

So what am I getting at? Artificially increasing final demand creates no wealth. When factories are driven to higher output their output takes place on declining margins unless the factory scale provides cheaper output. Cheaper output is the result of investment in plant that has decreasing marginal factor cost inputs. When final demand is stimulated artificially there's no a priori reason to invest in such plant. Final demand stimulation consumes its wealth creation at an ever greater rate so that inevitably factories are run with negative profit margins. Why not stimulate supply? It's against the official religion of the academic authorities.

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