Effective Demand Requires Purchasing Power

Steps:

• Recall that effective demand in economics is desire for a good backed by the ability to pay.
• Evaluate choices against this definition: focus on what enables actual purchase.
• Eliminate options unrelated to buying capacity, like surplus or advertising.
• Confirm A matches the core requirement of willingness plus ability to buy.

Why A is correct:

• Effective demand, per Keynesian economics, necessitates consumers' purchasing power to translate desire into actual market transactions.

Why the others are wrong:

• B: Consumer surplus is a benefit after purchase, not required for demand to exist.
• C: Demand can occur in public or private sectors; sector type is irrelevant.
• D: Advertising influences desire but does not ensure ability to buy.

Final answer: A