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?
A.a movement downward along the demand curve
B.shift the demand curves for all goods and services to the left
C. a movement upward along the demand curve
D shift the demand curves for all goods and services to the right
D. shift the demand curves for all goods and services to the right. With a 25% increase in population, there will be a corresponding increase in the number of consumers who demand goods and services, causing a rightward shift of the demand curve. This means that at any given price level, there will be a higher quantity demanded.
The correct answer is D. shift the demand curves for all goods and services to the right.
When the population of a country increases, the overall demand for goods and services also increases. This is because the new immigrants have needs and wants just like the existing population, leading to a higher demand for goods and services.
As a result, the demand for various products and services will shift to the right on the demand curve. This means that at every price level, the quantity demanded will increase due to the larger population. Therefore, the correct answer is D. shift the demand curves for all goods and services to the right.
To determine how the increase in population due to relaxed immigration barriers would influence demand, we need to consider the concept of demand and its relationship with population.
Demand represents the quantity of goods and services that consumers are willing and able to purchase at various price levels. It is influenced by several factors, including population size. When the population increases, demand tends to rise as well.
In this hypothetical scenario, we are told that the population is expected to increase by 25%. As a result, the number of consumers in the country will increase, leading to a higher overall demand for goods and services. Therefore, the correct answer would be:
D. shift the demand curves for all goods and services to the right.
To explain this further, when the population increases, the demand curve shifts to the right because there are more consumers demanding goods and services. This means that at any given price, the quantity demanded will be higher compared to the previous population level. As a result, businesses might experience an increase in sales and may need to produce more to meet the higher demand.
It is important to note that other factors, such as income levels and consumer preferences, may also influence demand. However, in this scenario, with all other economic forces held constant, the increase in population alone would cause a rightward shift in the demand curves for all goods and services.