Question

The retail store Macy's is closing a bunch of stores. How does the store closures affect employees? How do these factors affect wages and spending? How do these factors affect the demand curve? Will these factors cause the curve to move or shift? Explain.

Answer 1

When retail store is closing a bunch of stores then the employess working under these stores became jobless .They will throw out from job.Employess will not have enough money .they become unemployed person.In that case they do not have enough money to spend.When person have regular or steady income and they know that they will earn more then they make discretionary spending but if their wages is low or irregular then they will spend low.They will try to postponed their present spending to future.

Wages affect decesion making.if wages is higher and regular then people will spend more but if wages is lower then people will spend lower.Higher wages affect purchasing power.if retail store will be closed then employees wages become low or nil .In that cass demand of that good will be decrease.When supply is more but demand is lower then price of that goods is falls down.

These factor affect demand curve because demand of that goods is lower but supply of that goods is higher then prices goes down.

This causes the movement of demand curve because consumer's income is decreasing and hence he is unable to buy more goods but their is supply of goods.