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WAEC Economics 1995 Question 10

Question 10

Theory of Demand

Effective demand in Economics means

  1. A.the desire for a commodity
  2. B.a proposal to purchase a good on credit
  3. C.the desire for a commodity or service backed by purchasing power
  4. D.an irrevocable instruction to the seller to meet up the needs of the buyers
  5. E.the propensity to consume goods produced by manufacturers
Show the answer and explanation

Answer: C (the desire for a commodity or service backed by purchasing power)

Explanation

Effective demand is desire backed by the ability (money) and willingness to pay.