Which of the following is likely to shift the credit demand curve of an automobile manufacturer to the right,assuming all else equal?

Question

Quizplus · Accepted Answer

If an automobile manufacturer plans to increase production and expand to newer markets, it will likely need to obtain more credit to finance these endeavors. This will result in an increase in credit demand, shifting the credit demand curve to the right. A decrease in the real interest rate (option A) will also lead to an increase in credit demand, but it is unclear whether this will apply specifically to the automobile manufacturer. An increase in the real interest rate (option B) will decrease credit demand, shifting the curve to the left. A plan to decrease production and exit from existing markets (option D) will also likely decrease the need for credit, shifting the curve to the left.

Which of the Following Is Likely to Shift the Credit