The Effective Demand Principle
The effective demand principle states that “in a market economy – and, therefore a monetary economy, where money attends all functions (medium of exchange, unit of account and store of value), in every transaction of buying and selling there is only one autonomous decision: the spending one. As a result, all spending results in income of the same extent. By aggregation, the totality of spending in any given period is always equal to and determines the totality of income”.
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Famous quotes containing the words effective, demand and/or principle:
““More!” is as effective a revolutionary slogan as was ever invented by doctrinaires of discontent. The American, who cannot learn to want what he has, is a permanent revolutionary.”
—Eric Hoffer (1902–1983)
“To be sure, a good work of art can and will have moral consequences, but to demand of the artists moral intentions, means ruining their craft.”
—Johann Wolfgang Von Goethe (1749–1832)
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—David Hume (1711–1776)