Say's Law of Market
Say's Law of market is one of the major block of classical economics devised by French economist JB Say. He devised the fact that whatever demanded would be supplied automatically in exchange of money. So there will not be any overproduction or unemployment in an economy. It states that Supply creates its own demand. Case of Barter economy In case of barter economy, Say’s law hold obvious. Whatever produced in an economy would be automatically consumed or they are sold in the markets. Savings and Investment are not a separate process but they go hand in hand. Every amount supplied constitutes its own demand. For example, there is the possibility of contraction of oversupplied goods and the expansion of under supplied goods and hence the market will clear because there is possibility of variations in an exchange ratio. Case of Money using economy Say devised his theory which would be applied in barter system only. But the classical economists later find out that such situa...