How Markets Work Unit Test
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Question
In a hypothetical country, the population is expected to increase by 25% following recent legislation relaxing the barriers that restrict immigration. It is expected that the new immigrants will purchase the same goods and services as the current population does. If all other economic forces are held constant, how would this increase in population influence demand?(1 point)
Responses
a movement upward along the demand curve
a movement upward along the demand curve
a movement downward along the demand curve
a movement downward along the demand curve
shift the demand curves for all goods and services to the left
shift the demand curves for all goods and services to the left
shift the demand curves for all goods and services to the right
shift the demand curves for all goods and services to the right
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Correct response: shift the demand curves for all goods and services to the right
Explanation: An increase in population would lead to an increase in demand for goods and services, causing a rightward shift in the demand curves.