To encourage consumption, demand for goods was stimulated by all of the following EXCEPT:?

Question

a. advertising

b. the creation of consumer credit.

c. a new abundance and variety of goods available.

d. increased business competition.

Answer 1

d. increased business competition.

Competition affects supply, not demand.

Answer 2

d. increased business competition

Advertising is clearly meant to stimulate the desires and wants of consumers, otherwise what would be the incentive for firms to spend on advertising? Likewise, consumer credit is meant to expand the consumption possibilities. Variety of goods also stimulates consumption because it allows for people to be able to choose the good that most closely fits what each consumer wants.

However, business competition, while it can stimulate consumption if prices go down as a result of that competition, is more likely to affect only the supply side of the market.