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The Management of Demand
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- Words:
- 777
- Submitted:
- Thu Jul 11 2002
... David Pearce The Management of Demand The aim of this essay is to explain what the management of demand means. First of all I will examine the words "management" and "demand" separately. Demand is the want or need or desire for a product that is backed by an ability to pay. It is determined by a number of factors including income, tastes and the price of the complementary and substitute goods. The definition of management is fairly simple: the act, manner, or practice of managing; handling, supervision, or control. Simply put, demand management is the process of stabilising demand through economic tools such as monetary and fiscal policy. So who carries out demand management? The government. If there was a shortage of demand, its up to the government to boost it. This is achieved through reflationary or expansionary policies. Because it is believed that the economy can settle at equilibrium at any level of output, active intervention to
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