[Note: The distance between cities in California (US) distance chart below is straight line distance (may be called as flying or air distance) between the two locations in California (US) calculated based on their latitudes and longitudes. This distance may be very much different from the actual travel distance.]
In drawing the demand schedule or the demand curve for a good we take income of the people as given and constant. When as a result of the rise in the income of the people, the demand increases, the whole of the demand curve shifts upward and vice versa. The greater income means the greater purchasing power.
The Effect of Money Supply on the Economy. An increase in the supply of money typically lowers interest rates, which in turns generates more investment and puts more money in the hands of consumers, thereby stimulating spending. Businesses respond by ordering more raw materials and increasing production.