Question

How do household behavior and government policy influence the marketplace? Provide at least four examples with well-written support. Please explain in brief.

Answer 1

Answer -

Tax rates,tarrifs, subsidiary,import taxes etc are some Government policies to influence the market place. With fluctuations in any one of the Government policy,m it influences the market place tremendously.

In regard of household behaviour which can influence the market place are the following factors:

1.Earning of income - purchasing capacity of the people depends upon their level of income.When earning of income increases purchasing power will also rise and vice versa.

2.Improvement in technology. - with advanced technology the concept of market place being changed ,there is trend of online shopping so without face to face contact the exchange between buyer and seller is completed.

3. Promotion and advertising - It affected more on market . Through attractive promotion and marketing strategy consumers are induced to purchase the commodities and it also incfluence market .

4.Saving factor. - When consumers are preferred savings than current Consumption then their consumption may reduce and saving increases ,it also affects market.