Suppose you were a consultant to General Motors and were concerned with the fact that although demand is great today, GM may do poorly in the future because competition from foreign producers is growing and there is no indication it will stop. What would be a wise strategy now for you to address this concern? Advise GM that it should
a. seek a conglomerate merger with some other firm or group of firms
b. build larger plant capacity to increase your market share
c. create more brands (car models) in order to price discriminate
d. cut price to establish brand loyalty
e. seek a vertical merger with some other firm or group of firms
A
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Contractionary fiscal policy is deliberate government action to influence aggregate demand and the level of real GDP through:
a. expanding and contracting the money supply. b. encouraging business to expand or contract investment. c. regulating net exports. d. decreasing government spending or increasing taxes.
Explain productivity and discuss how it is related to the standard of living in terms of the circular flow model.
What will be an ideal response?