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Chapter 24: Q 16. (page 601)

What is Say’s law?

Short Answer

Expert verified

Say's law is an economic law.

Step by step solution

01

Step 1. Introduction

According to say’s law the ability to purchase something hangs on the ability to produce and in turn generate income.

Also, it says that the key to economic growth and prosperity is production and the authorities should motivate production instead of motivating consumption.

02

Step 2. Definition

Say’s law is a classical economic theory that says that the source of spending that generate demand to purchase current production is simply the income generated by past production and goods sale.

Say’s law is exactly the opposite of Keynes's law, which says that supply creates its own demand.

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