Stimulate demand

Definition

Stimulating demand refers to increasing consumer willingness and ability to purchase goods and services in an economy. This can be achieved through various means such as fiscal stimulus by the government, lowering interest rates by central banks, or implementing policies that boost consumer confidence.

Related terms

Aggregate demand: Aggregate demand is the total level of spending on goods and services in an economy at different price levels. It consists of consumption expenditure, investment expenditure, government expenditure, and net exports.

Monetary policy: Monetary policy refers to actions taken by a central bank to manage money supply and interest rates in order to influence aggregate demand in an economy.

Fiscal policy: Fiscal policy involves the use of government spending and taxation to influence aggregate demand in an economy. It includes measures such as changes in government spending, tax rates, and transfer payments.