The Law of Proportional Demand

  1.  The law of proportional demand says, the higher the price of goods and services, the higher the demand, and the lower the price of goods and services, the lower the demand. The first part of this law is so because at this time, only the rich are liable to spend their money on goods and services because they will always have money to spend. The rich in the society most times doesn’t feel the rise and fall of the economy, they are always willing to spend their money on goods and services at any day and any time, the cause of this demand only favours the rich and not the poor.  In The second phase of this law only the poor in the society are ready to spend their money on goods and services because the prices of goods and services are cheaper, this is so because at a cheaper rate, the poor are always willing to buy, and they don’t spend so much because they believe in savings.



Looking at the diagramme above at price 60 quantity demand increases to 250 but at the lower price of 10, quantity demand falls to 50, this is however so  becsuse as high income earners earn more, they are able to purchase more goods and services and at a higher cost, and as low income earners. earn less, they spend less and then save more. The law of Proportional demand is a law that needs to be operated in the world today, in the scense that as more people that will earn more will spend more and which will however lead to boosting of the economy, and those that will earn less will spend less and then result to savings, so after a cetain period of time, they can have to spend more. This is why at point A looking at the diagramme above, the high income earners increase their spending until it gets to point B; Now point B is the point where by the high income earners, reaches the peak of their savings, and at this time, they can now begin to buy goods and services again even at a higher price, this is because they have been able to save more over a certain period of time and also business owners and companies are always ready to purchase products even at a higher price this is because, they want their businesses to continue, they don’t wait for the prices of goods and services to fall before they can make purchase. For example, a competitive product that consumers derive perfect enjoyment from, eg a product like powdered milk, companies will be willing to purchase it even at a high price, because they will predict that it will go even more higher, this is because companies can not do without making a cup of tea for their staffs, so even at a higher price, powderd milk will be demanded. However this brings us to the change in proportional demand. Change in proportional demand is the level of change in the price of a commondity in relation to  the change in quantity demanded. Eg if the price of a commondity is 65, and then quantity demanded is 80%, then change in Proportional demand will be 80/100×65/1 =52%. This shows that as more people decide to spend their money on higher prices of goods and services, because they earn more, after a certain period of time, those prices of goods and services will fall, and this will however leads to low income earners be able to purchase the same goods and services.  Now looking at the market structure of the world economy,  it is not steady, it flunctuates, it is usually upward, slopping and downward. Which is indicated by the graph below. 


This upward  slopping downward proportional demand curve shows that the growth of the economy fluctuates from time to time. Point A indicate the boosting of the economy, either because those that earn more have decided to spend more, and also the low income earners that has saved over a long period of time has now decided to result to spending. Point B shows how consumers are gradually reducing their spending, and are beginning to save, and this can however affect the economy, and then point C is the point where by consumers has reduced the level of their spending drastically, and has resulted to about 75- 80% savings; This is the point where by people begin to complain of cash flow. Now there is no problem at all, this is just because people have decided to save more so they can either invest or have enough to spend even at a higher price.       







Looking at the diagram above,  M1, is represented by money supply, and then M2, is represented by more increase in money supply, showing the level of spending that consumers are willing to spend, inorderwards, spending more, and then saving less.

Consequently, L1 which is represented by reduction in the prices of goods and services ( lower prices of goods and services, ( L1) , which leads to reduction in spending, which in turn leads to increase in savings.

And then L2, which is represented by more reduction in the prices of goods and services, ( more lower prices of goods and services L2) , which leads to more reduction in spending, and which inturn leads to x 2 increase in savings.

This shows that money supply and savings work hand in hand, and increase in money supply which means increase in spending can affect savings negatively, and then changes in savings can affect the money supply, and then cause the economy to fluctuate from time to time.


How can the relationship between demand, supply, money supply, and savings, be used to explain Gods word, or how can Gods word be used to explain economic struggles, this is because God is interested in His children’s way of living, and He doesn’t want His children to suffer recessions, that is why He is interested in the government of the day, God wants an equal system of government where by the poor can afford at least what the rich can afford and there will be equal right in the society, this is Gods dream for the church, He wants His children to live at the top despite the economic situations faced by the government of the day, and He wants to feel the wealth of His children in the church, He wants them to sponsor the gospel, give to charity and also help the less privilege in the society without thinking of how bad the economy is, this is Gods desire He wants the effect of change in the economy to be an advantage to His church, to His kingdom and to the lives of people around the world, especially Christians. The world today might be faced with ups and down, as a result of changes in the economy, but God knows how to provide for His children that put their trust in Him.  

The Bible helps  us to understand that God is interested in our economy. Now in Israel, there was famine in the land which could be likened to recession in today’s term; but according to the scripture it was recorded that the famine in Israel was tough that the people begin to eat themselves, there wasn’t investment, nor savings as at the time. The economy was totally down, but God gave His word to His prophet Elisha and he Elisha declared, that the next day, the economy will be changed and that a measure of fine flour will be sold for a shekel, and two measures of barley for a shekel, in the gate of Samaria, this is like saying a bowl of flour will be sold at a cheaper rate, cheaper than the rate it was sold when there was no recession, this was unbelievable, the people could not understand why in the state of tough recession for years and then the next day, there is a prophesy that there will be a lot of food, and it will be so much, that the food will be sold cheap, but guess what, it came to pass.

The story of how God change the economy of Israel, within a day, the situation that was critical, no hope, men dying because of lack of food, but within a day, the story was changed, the economy was handled by God with just four lepers, 2 Kings 7 vs 3. God didn’t have to use normal people to change the economy of Israel, He used lepers, to show to us that He is the almighty God, He can do anything He says He would do, and for Him to use lepers to bring change in the city of Israel and there was so much food in the city. Today He can use anybody or anything to cause a change in the state of any economic recession and the rich and the poor will be equal, Now this is what God wants us to do, He wants us to know Him in a better form  because this is the only way  He can do for us what He did in the bible days so we can experience His change in our lives and in the lives of our loved ones, this is His dream that we would know him in a better way so He can always rectify our economic situations.

As Gods children, we are not moved by economic situations, and we are not moved by the problems of the nations and the economic changes of any nation does not determine our progress and prosperity, God wants us to begin to see things in another perspective that He is the God of all, the God of the old and the God of the new, the God that makes ways when there seems to be no way, the God that knows the end from the beginning, He is the almighty, He knows what to do to rectify every economic situation, because He is a loving God, He is a God of progress, so what does He wants us to do, He wants us to keep having a positive mentality even in the state of tough economic situation, He knows what to do to beautify our lives, so we can be called His children, He is the God that changes the economic state of countries, that is  why He wants us  to serve Him, He wants us to realize that He is interested in the progress of His children that put their trust in Him, because He is the God of the World, He can make countries to be a better place for its citizens because a citizens of a country are a gift to the country and when 65% of the citizens of a country are blessed, that country is said to be blessed and only the spirit of God can cause development in such a way that people will begin to imagine if God can change a whole economy, if He can do it in the bible days, He can also do it today.

The plans that God have is for every economy to be a better place for His children, that is why we need to show Him reverence that He is God and that He is the creator of the universe, this is what He wants for His children and the world at large because He is the God that knows the heart desire of all especially the heart desire of His children and for us to experience His love, we need to serve Him at all times and in every situation, because no matter the time He is able to meet us at the point of our need, so this is what He wants us to do as church to begin to pray for our economy, He wants us to fast and pray for our economy because as we begin to intercede for our leaders, it will bring a positive light in to our countries. This is what God wants, first of all praying for our leaders and for those in authority, because when we don’t pray for them, they are bound to make decisions that will be of negative effect to our economy, this is because the decisions made by our authorities can go a long way to either take us up or bring us down, because a country where strange laws are made, the citizens of such country don’t have peace, they either are not free to do the businesses of their choice, or they are not free to move around as a citizen. Freedom is very important in the lives of people in a country because when there is no freedom, the people keep relocating from one country to another in search of peace that is why God wants us to preach the gospel to the world especially those in authority so they will give their lives to Him and then begin to make the right decisions that will bring positive impact to the economy.

The law of proportional demand can be operated in nations of the world, in the sense that when the price of goods is high, the demand for the said goods will be high, this can be so when the citizens of countries are beginning to dwell in Gods awesome wealth, they begin to realize that God can provide for their needs, and they don’t need to wait for the price of goods and services to drop before they can buy such goods, they buy not thinking of the economic changes and they are not perturbed by the government of the day and they are not moved by economic crises, this is Gods dream for the citizens of different nations, its citizens, having enough to purchase at all times.

Gods plans for His children is to have enough to spend, not feeling the pressure of the economy, because His blessings has come to stay, and the positive mindset He wants His children to have, has come to stay, this is His gift for His children, not to be faced by economic crises and not to develop a negative mindset on how to live and meet up the economic demand. This is why the bible says the just shall live by faith. The world was created by God and for God, according to the bible, there was nothing that was created without Him; God created the world through His words, He formed the earth through His words that is why he wants us to keep declaring faith filled words to our nations, He wants us to speak forth what we need to see in our country, so He can ensure those words will come to pass because the whole of the universe was formed by His words and that is why He want us to live by faith trusting Him to accomplish what He says He will accomplish and trusting Him to grant us His favour and mercy, because that is the only way we can live in the world freely, and having positive mind set to dwell in the countries, even when there is recession, we will not be affected, and we will not speak negative word, staying in faith and having a positive mind-set that God is willing to rectify any economic struggles and cause us to triumph always in Him, this is what He wants for His children to be in a position whereby they know they can rectify changes in their places of locations, they know they can stand as one fellow to make decisions  that will make the world become a better place, lives will  be touched, and needs will be met, to the glory of God the father.

Have you ever wondered How God can help you fight your finance, how He can do it, and when He will do it. Firstly; you have to spend time to pray, so you can hear from God, you can receive instructions from Him that will lead to your blessings, you have to learn to yield yourself to the spirit of God, going out to share His word to friends and family, and staying in His presence continuously, which means constant fellowship with His word at all times and in every  situation, with this you can be sure to experience His financial prosperity in your life and in the life of your loved ones.

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