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? HELPPP How Markets Work Unit Test

Answer 1

The increase in population would lead to an increase in demand.

As a result of the legislation which would increase population, there would be a great influx of people into the hypothetical country. As a result, there would be an increase in demand for good and services. This would lead to a rightward shift of the demand curve while the supply curve remains unchanged.

As a result of demand been greater than supply, Equilibrium price and quantity would increase.

Please check the attached image for a diagram showing increase in demand on the demand curve

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Answer 2

Answer:

Shift the demand curves for all goods and services to the right

Explanation: