Question

How does consumer demand affect the economy?

A) Consumers earn most of the income.
B)
Consumers help determine what goods and services will be produced
through their purchasing decisions.
C) Consumers are polled by companies as to what products should be produced.
OD) Consumers only buy normal goods.

Answer 1

B) Consumers help determine what goods and services will be produced through their purchasing decisions.

Step-by-step explanation:

There are many factors that affect the consumers' demand for the goods. Some of them are the income of the consumers, rate of interest and inflation in the market.

With the growth in the economy, there arises a demand of the goods by the consumers. Increase in the demand of the goods, simultaneously helps in the increase in the growth of the economy. The choice of the consumers and their purchasing decisions helps the producers to manufacture those goods which ultimately accelerates the economy.