ECONOMICS
DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Demand will shift to the right.
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Demand will shift to the left.
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Demand will not shift, but the quantity of cars sold per month will decrease.
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Demand will not shift, but the quantity of cars sold per month will increase.
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Detailed explanation-1: -When people have less income to spend, they will reduce their consumption, making aggregate demand fall, and consequently, the demand curve will shift to the left.
Detailed explanation-2: -When the economy is sluggish, people will buy fewer goods and services at a fixed price point. Therefore, demand curves for most products will temporarily shift to the left during a recessionary period. Consumer spending and production generally bounce back due to pent-up demand, but that is not always the case.
Detailed explanation-3: -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? Demand will shift to the left. the quantity of a good that firms would offer for sale at different prices.
Detailed explanation-4: -A recession, sometimes called a contraction, is a period of economic slowdown and is often marked by high rates of unemployment, plunging stock prices, lower corporate profitability, and consumer anxiety.
Detailed explanation-5: -Basically, people have more money to spend than the economy can keep up with. Although, that said, rising prices can indeed sometimes slow down productivity. As prices for raw materials and labor go up, some companies may choose to cut back on their production, which can shrink economic activity overall.