We all have expectations, predictions, beliefs... (whatever you want to call them), about the immediate future, even if we aren't aware of them.

The most common expectation is that tomorrow will be very much like today. When you wake up tomorrow, you will probably expect prices for most items that you purchase to be about the same as what you paid for them today.

If something happens to change your beliefs about tomorrow, your demand for today would probably change. For example, if you learn that the price of sweaters will be reduced next week, you may put off buying a sweater until then. Thus, the demand for sweaters this week will be reduced, due to a change in expectations.

Copyright © 1995-2004 OnLineTexts.com, Inc. - All Rights Reserved