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Question
Identify the factor that affects market demand from the options below:
Options
Price of jointly produced goods
Consumer Credit Facility
Income of the consumer
Government policy
Solution
Government policy
Explanation:
Government policy can directly affect market demand through regulations, taxes, subsidies, and public spending. For example, if the government reduces taxes or increases subsidies on certain goods, it can increase consumers' purchasing power, leading to higher demand for those goods. Conversely, stricter regulations or higher taxes can decrease demand by making goods more expensive or less accessible.
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