Recall the recent “cash for clunkers” program that was implemented for a short time by the federal government. Do you think this program affected the supply curve or the demand curve for new cars, or both? Did the curve(s) shift to the right or the left? How do you think the program affected prices for new cars (before taking into account the “clunker” rebate)? Use the curve shift(s) to explain the price change.
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SUBJECTS / CATEGORIES:
1. Business Economics 2. Economics
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