How does an expected change in car prices affect consumption?
A) Higher car prices in the future prompts some to buy a new car now.
B) Higher car prices in the future prompts some to buy a new car in the future.
C) Lower car prices in the future prompts some to buy a new car now.
D) Lower car prices in the future prompts some to sell their car in the future.
E) Changes in car prices do not affect consumption.

Question

Quizplus · Accepted Answer

When consumers anticipate higher car prices in the future, they are more likely to purchase a car now to avoid paying more later, thus affecting current consumption patterns.

How Does an Expected Change in Car Prices Affect Consumption