Briefly discuss the determinants of demand other than price
What will be an ideal response?
An increase in income causes demand of a normal good to increase and demand of an inferior good to decrease. An increase in the price of a related good causes demand to increase if the two goods are substitutes and causes demand to decrease if the two goods are complements. An increase in population causes demand to increase. Demand increases if consumers develop more of a preference for the good. Expectations about the future also matter. If consumers think the price will increase in the future, current demand increases.
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Only when the goods market is in equilibrium is it true that ________
A) actual expenditure equals output B) the amount of goods and services produced equals actual expenditure C) planned expenditure equals the amount of goods and services produced D) demand for foreign goods equals foreigners' demand for domestic goods E) none of the above
For the late 19th and the first half of the 20th century, which of the following did NOT occur?
(a) The demand for foreign goods declined relatively as domestic income expanded. (b) Population soared. (c) Government intervention in market affairs slowed considerably. (d) The competitive economy fueled industrialization in the U.S.