The theory that supply creates its own demand and therefore full employment is natural situation is concerned with:

Say's law
Pigou's law of employment
Giffen's paradox
Keynesian theory of employment

The correct answer is: A. Say’s law.

Say’s law is an economic theory that states that supply creates its own demand. This means that if businesses produce goods and services, then people will have the money to buy them. This theory was first proposed by Jean-Baptiste Say in the early 1800s.

Pigou’s law of employment is a theory that states that unemployment can be reduced by increasing aggregate demand. This can be done by increasing government spending, lowering taxes, or increasing the money supply.

Giffen’s paradox is a phenomenon in which an increase in the price of a good leads to an increase in demand for that good. This can happen if the good is a necessity and people are willing to pay more for it even if it is more expensive.

Keynesian theory of employment is a theory that states that unemployment can be caused by a lack of aggregate demand. This can happen during a recession, when businesses are not producing enough goods and services to employ everyone who wants to work.

In conclusion, Say’s law is the theory that supply creates its own demand and therefore full employment is natural situation.

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