Demand Shock

Demand Shock
A sudden surprise event that temporarily increases or decreases demand for goods or services. A positive demand shock increases demand, while a negative demand shock decreases demand. Both positive and negative demand shock have an effect on the prices of goods and services.

When demand for a good or service increases (decreases) the price of that good or service typically increases (decreases) due to a shift in the demand curve to the right (left). This type of shock can come from such things as tax cuts or increases, loosening or tightening of the money supply and increases or decreases in government spending.

For example, a tax cut reduces the amount of money that taxpayers owe the government and frees up money for personal spending. This money is then used by taxpayers to consume certain products and services, which bids up their prices.


Investment dictionary. . 2012.

Игры ⚽ Нужно сделать НИР?

Look at other dictionaries:

  • Demand shock — Economics …   Wikipedia

  • demand shock — n. A sudden and large decrease in demand for goods and services. Example Citation: The Asian crisis has not, they contend, been a negative demand shock but a favourable supply shock, allowing Western companies to buy manufacturing goods more… …   New words

  • Demand shock — An event that affects the demand for goods in services in the economy. The New York Times Financial Glossary …   Financial and business terms

  • demand shock — An event that affects the demand for goods and services in an economy. Bloomberg Financial Dictionary …   Financial and business terms

  • Demand-pull theory — For demand pull inflation, see demand pull inflation. In economics, the demand pull theory is the theory that inflation occurs when demand for goods and services exceeds existing supplies.[1] According to the demand pull theory, there is a range… …   Wikipedia

  • Shock (circulatory) — Acute shock redirects here. For the psychological condition, see Acute stress reaction. Shock ICD 10 many incl. R57 ICD 9 785 DiseasesDB …   Wikipedia

  • Demand management — See also: Energy demand management Demand management is a planning methodology used to manage forecasted demand. Contents 1 Demand management in economics 2 Demand management in business 3 See also …   Wikipedia

  • statement shock — n. • The shock a person experiences when they see a large balance on their credit card statement, particularly in January. • The shock a person experiences when they see a large drop in the value of their investment portfolio. Example Citation: • …   New words

  • ticker shock — n. The anguish experienced by an investor who owns equities and who sees the value of their portfolio diminish when the stock market goes down (cf. sticker shock). Example Citation: Maybe it was cool headed professionalism or perhaps it was some… …   New words

  • feature shock — n. A computer user s reaction when faced with a program that has a large set of features. Example Citation: Since there now seems to be an inverse relationship between the number of features in a program and the size of the manual you receive,… …   New words

Share the article and excerpts

Direct link
… Do a right-click on the link above
and select “Copy Link”