SAY'S LAW: 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.

     See also | classical economics | flexible prices | saving-investment equality | circular flow | full employment | Keynesian economics | laissez faire | invisible hand |

SAY'S LAW, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2019. [Accessed: January 20, 2019].

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The decision to seek out or produce information based on a comparison of the cost of acquiring the information and the benefit obtained from the information. Efficient information search is achieved with a equality between the marginal cost of search and the marginal benefit of search. Because the marginal cost of search is invariably greater than zero, search effort stops short of acquiring complete information.

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