Question

What is meant by Effective Demand

Answer 1

Answer:

The effective demand means the sale of any goceries and any product which effect the amount of the groceries and the product .

Answer 2

Effective demand refers to the consumer demand for any product or service which is backed up by both willingness and financial ability of any consumer or buyer to buy that particular product or service.

Explanation:

• Effective demand essentially includes both the willingness and ability of the consumers or buyers to consume or purchase any particular commodity or service.
• In Microeconomics,effective demand is the one of the main parameters to study consumer demand or consumer behavior in a broader sense.
• Any consumer demand without consisting of either the willingness or interest to buy any product or service or the financial or monetary ability to pay for that product or service or both will not be considered as effective demand.
• The economic factors or components commonly affecting effective demand include price of the concerned product or service,prices of other related products or services such as substitute and/or complement goods,consumer or buyer income and so forth.
• In Macroeconomics,from Keyenesian standpoint,effective demand denotes the equilibrium in the goods market at which the aggregate demand in the economy is equal or identical to the aggregate supply and the economy operates at the equilibrium level of output or GDP.The price level in the economy corresponding to the effective demand or the goods market equilibrium is called the equilibrium price level in the economy.