What is the term for the demand for labor that arises from the demand for goods and services?

The term that describes the demand for labor, which is a result of the demand for goods and services, is derived demand. This concept is fundamental in economics because it highlights how labor is not demanded for its own sake but rather because it is needed to produce goods and services that consumers want to purchase.

When consumer demand for a particular product increases, businesses respond by increasing production to meet that demand, which in turn requires more labor. Thus, the demand for labor is derived from the consumer demand for the final goods and services produced.

In contrast, the other terms do not accurately capture this relationship. Direct demand typically refers to the demand for goods and services themselves without the intermediary of labor. Considered demand does not have a specific definition related to labor in economic theory. Aggregate demand encompasses total demand for goods and services in an economy at a given price level but does not directly relate to labor demand specifically.

Derived demand is therefore not only the correct term here but also illustrates a key principle of how labor markets function in response to overall economic activity.