Index
The Demand Curve 1
The Demand Curve 2
The Demand Curve 3
The Laws of Supply and Demand - 4
The Laws of Supply and Demand - 5
A ''Contraction'' of Demand - 6
''Ceteris Paribus'' - 7
An ''Expansion'' of Demand - 8
Marginal Utility - 9
Marginal Utility - 10
Marginal Utility - 11
Marginal Utility - 12
Consumer Surplus - 13
Consumer Surplus - 14
Price Discrimination - 15
An ''Expansion'' of Supply - 16
An ''Expansion'' of Supply - 17
Market Equilibrium - 18
Market Equilibrium - 19
Market Equilibrium - 20
Movements of the Demand Curve - 21
Movements of the Demand Curve - 22
Movements of the Demand Curve - 23
Inferior Goods - 24
Movements of the Demand Curve - 25
Movements of the Supply Curve - 26
Movements of the Supply Curve - 27
Movements of the Supply Curve - 28
The Income Effect - 29
The Substitution Effect - 30
The Substitution Effect - 31
The Substitution Effect - 32
The Substitution Effect - 33
Complements - 34
Complements - 35
Review: Factors Effecting Demand - 36
Review: Factors Effecting Demand - 37
The Goals of Firms - 38
The Goals of Firms - 39
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Movements of the Demand Curve - 25

Demand or spending can be financed either out of savings, or by borrowing. People will borrow more if they believe that economic conditions in the future will be better than they are today. A key factor in positive consumer expectations is employment. If people feel confident about future income, they borrow against it, and spend. This increases sales for firms, and increases profits. These firms hire more labour; and to a certain extent, you can ''guarantee'' your own employment if you can create demand (and production and employment) somewhere else. How much you borrow is highly influenced by the size of the repayments and the level of interest rates. If you borrow $10,000 for one year at 12% interest (annual), you will clearly pay more than you would if you borrowed $10,000 at 5% interest (annual). If you borrow at 12%, you will have to repay $1,200 in interest; at 5%, you will only have to pay back $500. In a sense, you have ''gained'' $700 in borrowing power. You can borrow more than $10,000, maybe $10,500. You can increase your consumption, and thus spending.