A new tool manufacturer opened a plant in town three months ago and hired 3000
new employees. People now have extra cash to spend and are out spending in the
town. What is an example of how this extra money may shift the demand curve for
goods and services in the town?
a)
There is a 20% decrease in the amount of tires sold at the local automotive
store.
b) The price of used cars has remained the same as before.
c) The local movie theaters are selling fewer tickets.
d) A local restaurant has a 40% increase in the number of dinners.



Answer :

Final answer:

Increased disposable income from new employment can boost demand for services like dining out.


Explanation:

An example of how extra money may shift the demand curve for goods and services in the town is:

  • D) A local restaurant has a 40% increase in the number of dinners.

When a new tool manufacturer hires 3000 employees, these individuals have more disposable income, leading to increased spending in the local economy. This increased spending can result in a higher demand for restaurant services, as seen in the increase in the number of dinners at a local restaurant.


Learn more about demand curve shifts due to increased spending here:

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