Consumer financing has become a common factor in the retail auto market; thus, any increases in the interest rate on car loans would cause the demand for cars to decline.

Name: Consumer financing has become a common factor in the retail auto market; thus, any increases in the interest rate on car loans would cause the demand for cars to decline.
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Question

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Higher interest rates on car loans increase the cost of financing for consumers, making car purchases more expensive and likely reducing demand.

Consumer Financing Has Become a Common Factor in the Retail