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 in 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.

Question

Quizplus · Accepted Answer

The government's actions to limit lending would decrease consumers' ability to purchase cars, leading to a decrease in demand, thus shifting the demand curve to the left.

In the Early 2000s Car Sales in China Had Slowed