Q.Increase in demand is caused by :

A higher subsidy raises purchasing power and shifts demand to the right, so the answer is option (d).

An increase in demand means the entire demand curve shifts rightward — buyers want more at every price. This is caused by factors that raise consumers' income or willingness to buy. Checking each option:

• Increase in interest rate — discourages borrowing and spending, reducing demand.
• Increase in tax — reduces disposable income, reducing demand.
• Decline in population — fewer buyers, reducing demand. …