What effect do rising disposable incomes due to an increase in the gross domestic product have on product demand?
Answer & explanation
Correct answer: option 4
Interest rates, inflation rates, changes in disposable income of people, stock market indices and the value of rupee are some of the economic factors that can affect management practices in a business enterprise. Short and long term interest rates significantly affect the demand for product and services. For example a rise in the disposable income of people due to increase in the gross domestic product of a country creates increasing demand for products.