A Reason That Firms Must Develop More New Products Than

question 3

Multiple Choice

A reason that firms must develop more new products than ever is which of the following?

• A) Product life cycles are shorter.
• B) Commitments to joint venture partners.
• C) They are replacing old customers with new ones.
• D) To amortize heavy investments in development labs.
• E) The increased difficulty of defending patents and trade names.

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Definitions:

Potential Level

The potential level refers to the maximum output that an economy can produce without leading to inflation, considering all factors of production are fully utilized.

Autonomous Net Taxes

Taxes that are not influenced by economic activity levels, operating independently of the economy's output.

Expansionary Gap

A condition where an economy's actual gross domestic product is higher than its long-run potential, leading to upward pressure on prices.

Government Purchases

Spending on products and services by all levels of government, not including transfer payments.