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What factors cause the shifts and movements of the demand curve?

A movement along the demand curve is caused by a change in price only. If price decreases, quantity increases and demand is said to have extended or expanded. If price increases, quantity decreases and demand is said to have contracted. The price of the good changing does not shift the curve, you just slide up and down the demand curve. A shift of the demand curve will be caused by a change in any factor other than price and a new curve is to be drawn. The easiest way to remember the factors that shift the curve is to use PIRATES:

Population

Interest Rates - if interest rates decrease, the quantity demanded increases as consumers can afford to borrow to buy more.

Real Disposable Income - if income after tax and inflation increases then consumers tend to spend more.

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Tastes and Fashions

Expectations - if consumers expect prices to fall they might reduce current consumption.

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