Say's Law

(noun)

The idea that money is perishable.

Related Terms

Examples of Say's Law in the following topics:

  • Clearing the Market at Equilibrium Price and Quantity

    • This definition requires a variety of assumptions which simplify the complexities of real markets to coincide with a more theoretical framework, most centrally the assumptions of perfect competition and Say's Law:
    • Say's Law hinges on the concept that capital loses value over time, or that money is essentially perishable.
    • The simplest way to view this law is interest rates.

  • Classical Theory

    • Supply creates its own demand: based on Say's Law, classical theorists believed that supply creates its own demand.

  • Aggregate Expenditure at Economic Equilibrium

    • Classical economists believed in Say's law, which states that supply creates its own demand.

  • The Law of Supply

    • The law of supply states that there is a positive relationship between the quantity that suppliers are willing to sell and the price level.
    • The law of supply is a fundamental principle of economic theory.
    • An upward sloping supply curve, which is also the standard depiction of the supply curve, is the graphical representation of the law of supply.
    • The law of supply in conjunction with the law of demand forms the basis for market conditions resulting in a price and quantity relationship at which both the price to quantity relationship of suppliers and demanders (consumers) are equal.
    • The law of supply and the law of demand form the foundation for the establishment of an equilibrium--where the price to quantity combination for both suppliers and demanders are the same.

  • How Taxes Work in the United States

    • Tax laws are passed by Congress and enforced by the Internal Revenue Service (IRS) at the federal level.
    • Federal taxes are created by the US Congress, which passes laws mandating what is taxed and the amount of the tax.
    • The IRS also has some power in determining exactly how the tax laws passed by Congress are interpreted and enforced.
    • At the same time, the IRS must also interpret the laws passed by Congress to determine what the law was intended to mean for a given organization or individual.
    • As would be expected with any law or interpretation of a law by a government body, there are disputes.

  • Antitrust Laws

    • Antitrust laws ensure that competitive environments are preserved in order to maintain an efficient and equitable capitalistic system.
    • While these antitrust laws differ from nation to nation, they can loosely be summarized in three components:
    • While the basic premise was the same as modern day competitive law, it was fairly rudimentary in scale and scope.
    • This act was expanded upon in 1914, with two more competitive laws: The Clayton Antitrust Act and the Federal Trade Commission Act.
    • Discuss antitrust laws aimed to improve competition and prevent monopolies from becoming more powerful

  • In the 1980s and 1990s

    • The law reduced support prices, and it idled 16 to 18 million hectares of environmentally sensitive cropland for 10 to 15 years.
    • Although the 1985 law only modestly affected the government farm-assistance structure, improving economic times helped keep the subsidy totals down.
    • Under the law, farmers would get fixed subsidy payments unrelated to market prices.
    • The law also ordered that dairy price supports be phased out.
    • In 1998 and again in 1999, Congress passed bailout laws that temporarily boosted farm subsidies the 1996 act had tried to phase out.

  • Institutions

    • Religious law and jurisprudence are common to almost all societies.
    • In these notes, Smith describes the role of law within a society.
    • Common law is based on stare decisis; i.e. laws emerge over time on the basis of precedence.
    • The Napoleonic code (dates from 1804) is based on Roman Law.
    • Commons (Legal Foundations of Capitalism, 1924) and Richard Posner (The Economic Analysis of the Law, 1973, sixth edition 2003) are foundations for two traditional approaches to law and economics.

  • The Law of Diminishing Returns

    • The law of diminishing returns states that adding more of one factor of production will at some point yield lower per-unit returns.
    • The law of diminishing returns states that in all productive processes, adding more of one factor of production, while holding all others constant ("ceteris paribus"), will at some point yield lower per-unit returns .
    • The law of diminishing returns does not imply that adding more of a factor will decrease the total production, a condition known as negative returns, though in fact this is common.
    • If the law of diminishing returns holds, however, the marginal cost curve will eventually slope upward and continue to rise, representing the higher and higher marginal costs associated with additional output.
    • However, as marginal costs increase due to the law of diminishing returns, the marginal cost of production will eventually be higher than the average total cost and the average cost will begin to increase.

  • The Law of Demand

    • In general, the law of demand states that the quantity demanded and the price of a good or service is inversely related, other things remaining constant.
    • In economics, the law of demand states that the quantity demanded and the price of a good or service is inversely related, other things remaining constant.