How Countries Spur Market Demand

An increase in market demand can be associated with the total amount of goods demanded by consumers in an economy and a view into the economic power of the consumers in a country. These are ways in which a country can increase market demand.

Decreasing Interest Rate

Interest rates determine how much consumers have to pay for a loan. Consumers are more likely to buy a lot more when interest rates are lowered. Lower interest rates mean lower monthly payments meaning consumers may make larger purchases that require loans like cars and homes. Also expected are the purchases of other lower-cost goods.

Decreasing Taxes

Reducing taxes gives consumers more available money in order to be used for purchasing goods and services. The more money consumers have the more purchases they are more likely to make. An increase in consumer spending can increase demand.

Government Spending

If the government increases their spending on goods and services they can increase market demand. Imbuing capital into the economy by means of government spending can lead to increased financial resources in the private sector that can give out financial resources to the consumers. As a result consumers will have an increase in disposable income to spend which will increase market demand.

Involvement in the International Scene

Market demand may also increase by making foreign-based purchases and direct investments. A fluctuation in exchange rates can cause the price of foreign goods to be cheaper than products made locally. Consumers from other countries may demand more goods from overseas which will increase purchases and thus, market demand in the country where the goods came from. Income grows in the country that supplies the goods, which will increase consumer spending and increase market demand.