Say's law

(redirected from Says Law)

Say's Law

The concept that, because that which is consumed must be produced, supply creates its own demand. That is, supply of products will eventually be consumed by demand. This is an important concept for supply-side economics; Keynesianism, however, holds the opposite view.

Say's law

the proposition that AGGREGATE SUPPLY creates its own AGGREGATE DEMAND. The very act of producing a given level of national output generates an amount of income (wages, profits, etc.) exactly equal to that output, which, if spent, is just sufficient to take up the purchases of the whole of the output that has been produced. It follows that, in order to reach the full-employment level at national output, all that needs to be done is to increase aggregate supply.

The key assumptions are that the economic system is ‘supply-led’ and that all income is spent. In practice, however, some income is leaked’ into saving, taxation, etc. (see CIRCULAR FLOW OF NATIONAL INCOME) and there is no automatic guarantee that all this income will be subsequently ‘injected’ back as spending. Thus, in contrast to the above proposition, the economic system is ‘demand-led’, a fall in aggregate demand leading to a multiple contraction of national income and output. See EQUILIBRIUM LEVEL OF NATIONAL INCOME.

References in periodicals archive ?
The three-member bench says law colleges should produce lawyers instead ofmunshisLAHORE: A three-member bench of the Supreme Court on Sunday formed a special committee and four provincial committees to assess the quality of legal education of the law colleges across the country, besides coming up with recommendations to improve it.
It's very important for the skin to be dry for it to be crisp,' says Law.
Insights gleaned from Edgewell's "think big, start small, scale fast" approach yields knowledge that can help retailers boost shopper engagement in the aisle to improve cross-purchase and trade-up opportunities, says Law.
LAHORE -- Information Minister Pervaiz Rashid says law enforcement and intelligence agencies are capable enough to grapple with the challenge and exterminate remnants of terrorist outfits.
The Board of Supervisors will consider a proposal Tuesday that says law enforcement can only turn over criminal suspects to federal immigration authorities if they are charged with a violent crime and have been convicted of a violent crime within the last seven years.
Addressing the ceremony, Chief Minister Gilgit-Baltistan Hafiz Hafeez-ur-Rehman says law and order situation has improved in Gilgit-Baltistan as a result of steps taken by the Government.
Bandersnatch Cummerbund Child sex abuse grooming 'massive issue' for Huddersfield, says law firm I can't believe that in 2015 in the supposedly civilised West, this kind of thing goes on.
The scarce, poor service the Jerusalem Municipality and Israeli institutions provide are not in accordance with the amount of taxes paid by Jerusalemites," says LAW, a Jerusalem-based Palestinian human rights center.
Law school falsified jobs data, according to ex-employee Justice Thomas says law school rankings cause discrimination Rankings shouldn't be primary concern for prospective law school students DOJ says LSAT is discriminatory
The citizens of Macedonia were not convinced in Tarcluovski's guilt, says Law Professor Nikola Tupancevski.
The process of counting the population was interrupted shortly after it began and was put off, says law expert Osman Kadriu, adding that Macedonia is about to take a difficult test.
It's about the overuse of prescription pills in New York," says Law, who plays a doctor who encourages a young woman (Rooney Mara) onto antidepressants, with devastating effects.