It is a measure of how well the money invested in the business is providing a return to the investors. If the government decide to reduce the level of taxation, they may also want to reduce the level of government expenditure by an equivalent amount. It is therefore termed a revenue-neutral policy. S Savings Savings are any income that is not spent, but put aside. In an economic sense we would also include buying shares or securities as part of this.
Savings are a leakage or withdrawal from the circular flow.
Say's Law Say's Law was developed by French economist Jean-Baptiste Say . If this is done then the extra output will be demanded. If they are lucky they find one quite quickly, but they may be unlucky and it may take some time. On average it will take everybody a reasonable period of time as they search for the right job. This creates unemployment while they look.