Re-discovering Demand
I guarantee that you don't really know what DEMAND is. You have probably taken economics courses. You have probably read lots of newspaper articles recently on economics and the state of our economy. You probably think you know what demand is. But I will put money on it that you don't. PROVE ME WRONG!
- 1.Define demand in economic terms.
- A.
The desire to purchase, coupled with the power to do so.
- B.
Not answer A.
- 2.What is the most common medium of exchange, used to purchase things?
- A.
Money
- B.
Not answer A.
- 3.What is the most common way to acquire money?
- A.
Selling something.
- B.
Not answer A.
- 4.If you currently have nothing to sell (as a way of acquiring money), what is a reasonable and likely thing to do in order to obtain something to sell?
- A.
Produce something.
- B.
Not answer A.
- 5.Why do we produce things?
- A.
To sell them in exchange for money.
- B.
Not answer A.
- 6.Why do we need money? After all, money has no intrinsic value. Money is simply a medium of exchange.
- A.
To purchase things.
- B.
Not answer A.
- 7.Why do we produce things?
- A.
Because we have a demand for other things. And because we don't live in a 100% barter economy, we thus need money to exchange for other good that we don't have. But to get money, we first have to produce something that will be purchased with money.
- B.
Not answer A.
- 8.Does Somalia have a need for food and clean water or a demand for them?
- A.
Need.
- B.
Demand.
- 9.Is need equal to demand?
- A.
No.
- B.
Yes.
- 10.Is it safe to say that production (or supply) is in fact demand? Or another way of saying it, is supply simply the other side of the same coin?
- A.
Yes.
- B.
No.
- 11.All other things being constant, if you increase the money supply, will the purchasing power of your dollars go down?(more money chasing after the same amount of goods causes prices to go up)
- A.
Yes.
- B.
No.
- 12.What does it mean to stimulate the economy?
- A.
Demand for goods and services increases. (remember, demand is the desire to purchase, coupled with the power to do so)
- B.
The money supply increases.
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