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In my German 1 class, we learned that there are pronouns such as the following:
But we also just learned about the demonstrative pronoun:
And I'm having trouble differentiating between using one set of pronouns versus the other in the following example sentence:
Gibst du ihm dein Auto? - Nein, ... gebe ich mein Auto nicht
Since this is a unit on demonstrative pronouns, the correct answer was "dem." But I'm wondering why I could not just as well say "ihm." What's the difference?
You're completely right: you could just as well say "ihm" here, of course. If you then also use the "standard" word order (with the subject in position 1), you end up with a perfectly neutral, matter-of-factly sounding sentence:
Nein, ich gebe ihm mein Auto nicht.
But the clue is already in the fact that in this sentence, they've put the dative object - "(to) him" - in the first position, which in itself serves to emphasise the dative object over the subject.
This effect is strengthened by using a demonstrative pronoun. "Demonstrate" comes from the Latin for "to show" or "to point", and demonstrative pronouns are about doing exactly that -- "pointing" at an object in either the direct (choosing stuff to buy at a store) and the more abstract (designating one of various options) sense. And in the way it is used here, this emphatic pointing at "him" has exactly the same meaning as saying "that guy" in English - you're singling him out for being particularly horrible/unreliable etc.
To recap:
