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Say’s law of MARKET.

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Presentation on theme: "Say’s law of MARKET."— Presentation transcript:

1 Say’s law of MARKET

2 INRODUCTION Say’s law of market states that supply creates its on demand which means AD=AS

3 Define J.B. Say,’ Supply creates its own demand.”

4 Assumptions Flexible prices Money – a veil No hoarding
State is neutral Perfect competition Long period Production according to consumer preference Supply of labour and capital is perfectly elastic

5 Explanation Say’s law and barter economy
Say’s law and monetary economy

6 Implications General over-production is impossible
General unemployment is impossible Automatic adjustment Equality b/w saving and inv. Money is but a veil Partial over production and partial unemployment are possible Policy implication ( Free Economy)


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