Why a national slump that began with housing affect companies like General Motors. Concept Introduction: Slump: Every economy faces different business cycle at different points of time. Recession is one such business cycle. During recession, there is a huge unemployment and a fall in production of goods and services. Recession slows down the business activities. The main reason for such phenomenon is the lack of demand and low investment level. When the recession is for longer duration it is known as depression or Slump. Therefore, slump is the period in an economy when demand and production for goods and services decrease.

Question

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Answer 1

Question

Chapter 26, Problem 1BCQ

To determine

Why a national slump that began with housing affect companies like General Motors.

Concept Introduction:

Slump: Every economy faces different business cycle at different points of time. Recession is one such business cycle. During recession, there is a huge unemployment and a fall in production of goods and services. Recession slows down the business activities.
The main reason for such phenomenon is the lack of demand and low investment level. When the recession is for longer duration it is known as depression or Slump. Therefore, slump is the period in an economy when demand and production for goods and services decrease.

Expert Solution & Answer

Explanation of Solution

The slump that started with housing sector affected companies like GM Company. In an economy, every sector is interlinked and gets affected through multiplier effect.
Housing is a basic need of people. When they have it then they look for luxurious items like vehicles.
When there was a slump in housing in the US, people stopped buying luxurious goods like automobile. This led to decrease in the demand for auto mobile. Consequently the production declined very sharply.

Conclusion:

Thus, slump in housing market negatively affected companies like GM Company.

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Answer 2

Question

Chapter 26, Problem 1BCQ

To determine

Why a national slump that began with housing affect companies like General Motors.

Concept Introduction:

Slump: Every economy faces different business cycle at different points of time. Recession is one such business cycle. During recession, there is a huge unemployment and a fall in production of goods and services. Recession slows down the business activities.
The main reason for such phenomenon is the lack of demand and low investment level. When the recession is for longer duration it is known as depression or Slump. Therefore, slump is the period in an economy when demand and production for goods and services decrease.

Expert Solution & Answer

Explanation of Solution

The slump that started with housing sector affected companies like GM Company. In an economy, every sector is interlinked and gets affected through multiplier effect.
Housing is a basic need of people. When they have it then they look for luxurious items like vehicles.
When there was a slump in housing in the US, people stopped buying luxurious goods like automobile. This led to decrease in the demand for auto mobile. Consequently the production declined very sharply.

Conclusion:

Thus, slump in housing market negatively affected companies like GM Company.

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Answer 3

Question

Chapter 26, Problem 1BCQ

To determine

Why a national slump that began with housing affect companies like General Motors.

Concept Introduction:

Slump: Every economy faces different business cycle at different points of time. Recession is one such business cycle. During recession, there is a huge unemployment and a fall in production of goods and services. Recession slows down the business activities.
The main reason for such phenomenon is the lack of demand and low investment level. When the recession is for longer duration it is known as depression or Slump. Therefore, slump is the period in an economy when demand and production for goods and services decrease.

Expert Solution & Answer

Explanation of Solution

The slump that started with housing sector affected companies like GM Company. In an economy, every sector is interlinked and gets affected through multiplier effect.
Housing is a basic need of people. When they have it then they look for luxurious items like vehicles.
When there was a slump in housing in the US, people stopped buying luxurious goods like automobile. This led to decrease in the demand for auto mobile. Consequently the production declined very sharply.

Conclusion:

Thus, slump in housing market negatively affected companies like GM Company.

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Answer 4

Question

Chapter 26, Problem 1BCQ

To determine

Why a national slump that began with housing affect companies like General Motors.

Concept Introduction:

Slump: Every economy faces different business cycle at different points of time. Recession is one such business cycle. During recession, there is a huge unemployment and a fall in production of goods and services. Recession slows down the business activities.
The main reason for such phenomenon is the lack of demand and low investment level. When the recession is for longer duration it is known as depression or Slump. Therefore, slump is the period in an economy when demand and production for goods and services decrease.

Expert Solution & Answer

Explanation of Solution

The slump that started with housing sector affected companies like GM Company. In an economy, every sector is interlinked and gets affected through multiplier effect.
Housing is a basic need of people. When they have it then they look for luxurious items like vehicles.
When there was a slump in housing in the US, people stopped buying luxurious goods like automobile. This led to decrease in the demand for auto mobile. Consequently the production declined very sharply.

Conclusion:

Thus, slump in housing market negatively affected companies like GM Company.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 26, Problem 1BCQ

To determine

Why a national slump that began with housing affect companies like General Motors.

Concept Introduction:

Slump: Every economy faces different business cycle at different points of time. Recession is one such business cycle. During recession, there is a huge unemployment and a fall in production of goods and services. Recession slows down the business activities.
The main reason for such phenomenon is the lack of demand and low investment level. When the recession is for longer duration it is known as depression or Slump. Therefore, slump is the period in an economy when demand and production for goods and services decrease.

Expert Solution & Answer

Explanation of Solution

The slump that started with housing sector affected companies like GM Company. In an economy, every sector is interlinked and gets affected through multiplier effect.
Housing is a basic need of people. When they have it then they look for luxurious items like vehicles.
When there was a slump in housing in the US, people stopped buying luxurious goods like automobile. This led to decrease in the demand for auto mobile. Consequently the production declined very sharply.

Conclusion:

Thus, slump in housing market negatively affected companies like GM Company.

Answer 6

Chapter 26, Problem 1BCQ

To determine

Why a national slump that began with housing affect companies like General Motors.

Concept Introduction:

Slump: Every economy faces different business cycle at different points of time. Recession is one such business cycle. During recession, there is a huge unemployment and a fall in production of goods and services. Recession slows down the business activities.
The main reason for such phenomenon is the lack of demand and low investment level. When the recession is for longer duration it is known as depression or Slump. Therefore, slump is the period in an economy when demand and production for goods and services decrease.

Expert Solution & Answer

Explanation of Solution

The slump that started with housing sector affected companies like GM Company. In an economy, every sector is interlinked and gets affected through multiplier effect.
Housing is a basic need of people. When they have it then they look for luxurious items like vehicles.
When there was a slump in housing in the US, people stopped buying luxurious goods like automobile. This led to decrease in the demand for auto mobile. Consequently the production declined very sharply.

Conclusion:

Thus, slump in housing market negatively affected companies like GM Company.

Answer 7

Chapter 26, Problem 1BCQ

To determine

Why a national slump that began with housing affect companies like General Motors.

Concept Introduction:

Slump: Every economy faces different business cycle at different points of time. Recession is one such business cycle. During recession, there is a huge unemployment and a fall in production of goods and services. Recession slows down the business activities.
The main reason for such phenomenon is the lack of demand and low investment level. When the recession is for longer duration it is known as depression or Slump. Therefore, slump is the period in an economy when demand and production for goods and services decrease.

Answer 8

Expert Solution & Answer

Explanation of Solution

The slump that started with housing sector affected companies like GM Company. In an economy, every sector is interlinked and gets affected through multiplier effect.
Housing is a basic need of people. When they have it then they look for luxurious items like vehicles.
When there was a slump in housing in the US, people stopped buying luxurious goods like automobile. This led to decrease in the demand for auto mobile. Consequently the production declined very sharply.

Conclusion:

Thus, slump in housing market negatively affected companies like GM Company.