Question

Mass layoffs by large companies such as Boeing or General Motors are a concern to the citizens and leaders where those firms are located because

A. unemployment and lost wages are multiplied into larger declines in output.
B. it will discourage other company expansions.
C. unemployment and lost wages create smaller declines in output.
D. these large companies have too much economic power.

Answer 1

Mass layoffs from large firms lead to broader economic issues including larger output declines due to unemployment and lost wages, negative impacts on local economies, and potentially discouraging other business expansions.

Step-by-step explanation:

Mass layoffs by large companies such as Boeing or General Motors are a major concern because unemployment and lost wages are multiplied into larger declines in output, affecting not just the individual workers but the broader economy as well. When these firms lay off a significant number of employees, it contributes to a slowdown in economic activity since the laid-off workers have less money to spend, which can lead to further job losses and creates a negative feedback loop in the economy.

Moreover, other potential effects include discouraging other company expansions due to economic uncertainty and undermining support for globalization if new jobs are not created to replace those lost to outsourcing or relocation to countries with cheaper labor costs.