Unit 1.2 · Economic Methodology and the Evolution of Economic Thought
Classical Macroeconomics and Say’s Law (19th Century)
AO2
Syllabus Requirement
Describes Say’s Law of markets and the implied self-correcting nature of economies.
Assessment Objectives
AO2Application and Analysis
Summary
Classical macroeconomics emerged in the 19th century, emphasizing that market economies can achieve full employment in the long run through flexible prices, wages, and interest rates. A key concept is Say's Law, which suggests that production generates income that creates demand, allowing the economy to self-correct without significant government intervention.