The level of demand that represents a real intention to purchase by people with the means to pay.
- The key point is that the effect of a lower price level on real aggregate effective demand is not the same as the effect of a falling price level or expectations of a falling price level.
- Conceivably effective demand and real income could be increased just as readily as a consequence of the lower prices from the removal of all levies on imported goods.
- This opens the way for state intervention to regulate the level of effective demand to secure full employment.
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Syllabification: ef·fec·tive de·mand
Definition of effective demand in:
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