Effective demand refers to: A. The total amount of spending in the economy B. The total supply of goods and services in the economy C. The balance between savings and investment in the economy D. The ability of consumers to purchase goods and services at prevailing prices
Question
Effective demand refers to: A. The total amount of spending in the economy B. The total supply of goods and services in the economy C. The balance between savings and investment in the economy D. The ability of consumers to purchase goods and services at prevailing prices
Solution 1
Effective demand refers to D. The ability of consumers to purchase goods and services at prevailing prices.
This concept is rooted in Keynesian economics, where effective demand is defined as the point where aggregate demand equals aggregate supply. It's not just about the desire to buy something, but also about having the means or ability to purchase it. So, it's about consumers not only wanting goods and services but also being able to afford them at the current prices.
Solution 2
Effective demand refers to D. The ability of consumers to purchase goods and services at prevailing prices.
This concept is rooted in Keynesian economics, where effective demand is defined as the point where aggregate demand equals aggregate supply. It's not just about the desire to buy something, but also about having the means or ability to purchase it. So, it's about consumers not only wanting goods and services but also being able to afford them at the current prices.
Similar Questions
Demand, or effective demand, is...A. The various quantities of a good or service the consumer is willing to buy at different prices during a particular time periodB. Demand that is backed by sufficient incomeC. The various quantities of a good or service the consumer is willing and able to buy at different prices, during a particular time periodD. The various quantities of a good or service the consumer is able to buy at different prices during a particular time period
principle of effective demand
What is ‘effective demand’ for tourism’?Select one:a.Demand that is yet to be realised.b.Demand that is efficient.c.The actual number of tourists who are travelling.d.Demand that adds value to the destination.
Explain the concept of effective demand using a hypothetical table & curve.
Effective demand is influenced by: A. Government regulations and policies B. Interest rates set by the central bank C. Consumer income and expectations D. The level of international trade and exports
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.