During a recession, economies experience increased unemployment and a reduced level of activity. How would a recession be likely to affect the market demand for new cars?

Question

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During a recession, consumers have less income and are less likely to make significant purchases such as new cars. This decrease in consumer spending leads to a leftward shift in the demand curve for new cars, indicating a decrease in demand at any given price.

During a Recession, Economies Experience Increased Unemployment and a Reduced