Question

In the early 2000s car sales in China had slowed in part caused by the government's actions to limit businesses from lending funds to consumers. Assuming the car market in China can be analyzed with demand and supply curves, what best reflects the change m the market?

A) Demand curve shifts to the left with no change in supply.
B) Supply curve shifts to the left with no change in demand.
C) Both the supply and demand curves shift to the left.
D) Both the supply and demand curves shift to the right.

Answer 1

A) Demand curve shifts to the left with no change in supply.

Step-by-step explanation:

The restriction on loans would reduce the demand for cars. As a result, the demand for cars in China would fall and the demand curve would shift leftward.

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