ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A demand shifter is a change that shifts the demand curve for a product. One of the demand shifters is buyers’ expectations. If a buyer expects the price of a good to go down in the future, they hold off buying it today, so the demand for that good today decreases.

Detailed explanation-2: -If people expect that the price of something will rise in the future, they will buy more of it today instead of at a later time when it is more expensive. This expectation of higher prices in the future causes the demand curve to shift to the right-i.e., there is more demand at each price today.

Detailed explanation-3: -Factors that can shift the demand curve for goods and services, causing a different quantity to be demanded at any given price, include changes in tastes, population, income, prices of substitute or complement goods, and expectations about future conditions and prices.

Detailed explanation-4: -Answer and Explanation: A change in expectations could shift either the demand curve or the supply curve. The given statement is TRUE. A change in expectations about future prices can affect both demands as well as the supply curves.

Detailed explanation-5: -Demand for goods and services is not constant over time. As a result, the demand curve constantly shifts left or right. Specifically, there are five major factors that can shift the demand curve: income, trends and tastes, prices of related goods, expectations, as well as the size and composition of the population.