Answer- Option “2” is correct that says, ” Supply and Demand”.
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Supply and demand is not one of the terms that describes cyclical nature of market economies.
Supply- Supply is the total quantity of goods and services, available in the market for customers.
Demand- It is a customer’s desire to buy and pay the price for something (Goods or services).
Demand and supply are the two main components of economy, in any economy when supply of goods increases, prices come down and vice versa. If supply remains constant and demand increases then price of that particular product increases.