Question

One consequence of rail deregulation was the reduction of operating expenditure. This resulted from several changes by the rail companies including all of the following EXCEPT:

a) Abandoning unprofitable lines
b) Reducing labor costs
c) Investing in modern technology
d) Increasing government subsidies

Answer 1

Rail deregulation aimed to reduce operating expenses through means such as abandoning unprofitable lines, reducing labor costs, and investing in modern technology, but not through d) increasing government subsidies.

Step-by-step explanation:

One consequence of rail deregulation was the reduction of operating expenditure, which could have been achieved through several strategies except for increasing government subsidies.

During the period of deregulation, starting in the late 1970s and continuing into the 1990s, government restrictions on various industries, including the railroad industry, were eliminated or reduced.

This favored competition and market-driven decisions over government intervention.

• Abandoning unprofitable lines would reduce costs by eliminating expenses associated with maintaining and operating these lines.
• Reducing labor costs could be achieved through renegotiation of labor contracts, layoffs, or improved labor productivity.
• Investing in modern technology would help rail companies increase efficiency and thus reduce operating costs.

The only option listed that is not a result of rail deregulation is 'd) Increasing government subsidies,' as deregulation aimed to reduce government involvement rather than increase it.