The correct statement to explain why the balloon appears to move backward relative to the car when the car starts moving forward is:
The car moves forward, while inertia keeps the balloon in place.
This is because the balloon has inertia, which is the tendency of an object to resist changes to its state of motion. When the car accelerates forward, the balloon tends to remain in its original position due to its inertia, making it appear to move backward relative to the car.