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Companies Must Balance the Number of Items in a Product

question 5

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Companies must balance the number of items in a product line.Too many items and customers find it difficult to see the differences between the products.Too few products and the company runs the risk of _______.


Definitions:

Crowding Out

A decrease in investment that results from government borrowing.

Accelerator Effects

The phenomenon where an increase in national income leads to a proportionally larger increase in investment spending, magnifying the initial rise in income.

Automatic Stabilizer

Economic policies and programs, such as unemployment insurance and taxation, that automatically adjust to counteract economic fluctuations without the need for government intervention.

Money Market

A section of the financial market where short-term financial assets with high liquidity are traded.

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