Mova Electronics, a Leading Pager Manufacturer, Recently Declared Itself Bankrupt

question 55

Multiple Choice

Mova Electronics, a leading pager manufacturer, recently declared itself bankrupt.This was attributed to a decision the company made in the past.While most of Mova's competitors were shifting their research focus toward cell phones, Mova invested most of its retained earnings on improvising its pagers.Once the pager market drastically declined, Mova Electronics was unable to capitalize on the new technology.Which of the following does this scenario best illustrate?

• A) Causal ambiguity
• B) Knowledge diffusion
• C) Social complexity
• D) Path dependence

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Definitions:

Net Exports

The value of a country's total exports minus the value of its total imports. It is a component of GDP that indicates a country's trade balance.

Money Supply

The sum of all financial assets in an economy at a specific time.

Interest Rates

The cost of borrowing money or the return for investing, usually expressed as a percentage per annum.

Aggregate Demand

Represents the total demand for goods and services within a particular economy at a given overall price level and in a given time period.