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68. An industry analysis for manufacturers of a small personal care gadget observed the
following characteristics:
1. Industry sales have grown at 15%-20% per year in recent years and are expected to grow at
10%-15% per year over the next 3 years, still well above the economic growth rate.
2. Some U.S. manufacturers are attempting to enter fast-growing non-U.S. markets, which remain
largely unexploited.
3. Some manufacturers have created a new niche in the industry by selling directly to customers
through mail order. Sales for this industry segment are growing at 40% per year.
4. The current penetration rate in the United States is 60% of households and will be difficult to
increase.
5. Manufacturers compete fiercely on the basis of price, and price wars within the industry are
common.
6. Some manufacturers are able to develop new, unexploited niche markets in the United States
based on company reputation, quality, and service.
7. Several manufacturers have recently merged, and it is expected that consolidation in the
industry will increase.
8. New manufacturers continue to enter the market.
Which of the characteristics would be typical of an industry that is in the maturity stage?
69. Countercyclical fiscal policy is best described by which of the following statements?
70. A supply-side economist would likely agree with which of the following statements?
71. Which of the following actions should the central bank take if monetary authorities want
to reduce the supply of money to slow the rate of inflation?
72. The decline in the value of the dollar relative to the yen will have what impact on the
purchase of U.S. goods in Japan?
73. Which of the following are examples of cyclical industries?
I. Maytag
II. Computer chip manufacturers
III. Kellogg's Frosted Flakes
IV. Pfizer
74. You would expect the beta of cyclical industries to be ______ and the beta of defensive
industries to be ______.
75. What economic variable is most closely associated with increasing corporate profits?
76. The federal government decides to pay for the transition to private social security
accounts with a one-time $1 trillion bond issue. What will be the biggest concern to businesses
relative to the "crowding out" effect?
77. An expanding economy requires more workers. If the supply of workers becomes
inadequate to meet the demand, what is the likely impact on the economy?
78. An expanding economy puts stress on the manufacturing ability of a company. When a
firm turns business down during periods of economic expansion, a problem exists in the area of
____________.
79. The expansion of the money supply at a rate that exceeds the increase in goods and
services will likely result in ___________.
80. The supply of funds in the economy is controlled primarily by ____________.
81. The classification system used to classify firms into industries is now called the _____
code.
82. During 2004 China increased its use of global oil by 40%. This followed a 100% increase
during the previous 5 years. How do economists refer to this kind of economic event?
83. Whenever OPEC attempts to influence the price of oil by significantly altering production,
economists refer to this type of event as a ______________.
84. Items that are ____________ and product purchases for which ________ is not important
tend to be less cyclical in nature.
85. Cash cows are typically found in the _________ stage of the industry life cycle.
86. At what point in the industry life cycle are inefficiencies in competitors most likely to be
removed?
87. Stalwarts are typically found in the _________ stage of the industry life cycle.
88. Large-growth companies generally emerge in the __________ stage.
89. Which of the following are barriers to entry?
I. Large economies of scale required to be profitable
II. Established brand loyalty
III. Patent protection for the firm's product
IV. Rapid industry growth
