Say's Law is based on the argument
markets are usually in equilibrium.
assets earning higher returns are usually more
in a barter economy a decision to sell
is also a decision to buy.
if all markets but one are in
equilibrium, then the last also must be in
The island of economy of Mini Ini is
primitive, with trade being conducted purely in barter
terms. There are only three items that are exchanged:
fish, coconuts, and bananas. Today there is a surplus of
fish and bananas. What can we say about the condition of
the coconut market?
It must have a surplus too.
It must have a shortage.
It is in equilibrium.
We cannot say anything with this information.