Question

Over the summer, 100 new families moved into town. This will _____ the demand for goods and services, at each price level. increase decrease

Answer 1

The answer to the blank is: increase.

The law of demand and offer, first formulated scientifically by Adam Smith in the 18th century, basically states that a social groups will manifest certain objectified needs which the market will offer in a correlative and quantitative relationship. In the text above, we are being told that more families will move into town (a greater quantity), which means that the demands for goods and services will also and necessarily increase, which will in turn modify the offer (the price) of these demands.

Answer 2

The correct answer is increase.

If new people arrive they have to purchase goods and services which would increase the demand for those goods and services.