Share This Article:

Economic Definition of Say's law. Defined.

Offline Version: PDF

Term Say's law Definition: A classical economic proposition stating that the production of aggregate output creates sufficient aggregate demand to purchase all of the output produced. In other words, supply creates its own demand. This is one of the three assumptions underlying the macroeconomic theory of classical economics which concluded that unrestricted market activity would generate full employment. The other two assumptions are flexible prices and saving-investment equality. Say's law is closely associated with the circular flow model.


« savings deposits | SBA »


Alphabetical Reference to Over 2,000 Economic Terms