Write any four factors responsible for increase in demand for goods and services?


Demand for goods and services increases due to following factors:
1.       Increase in Public and Private Expenditure: -Due to war, developmental policies etc., public expenditure increases. It leads to an increase in demand for goods and services in the economy.
Anincrease in private expenditure leads to a rise in demand for goods and services.

2.       Increase in Export: -An increase in export reduces the stock of commoditiesavailable for home consumption. It creates a shortage of goods in the economy. So demand exceeds the supply.

3.       Reduction in Taxation: -When taxes are reduced, there is an increase in the purchasing power of consumers. So demand increases.

4.       Rapid growth of population: -A rapidly growing population increases level of demand for goods and services in a country.


5.       Deficit financing: -Government meets the deficit by borrowing from the public and reserve bank and also by printing notes. This raises money supply. Therefore, demand and prices rise.