O-LevelEconomicsMicroeconomic decision makers2281/11 · Oct/Nov 2011 · Q201 Mark

General Motors, a large multi-national company based in the United States, sold some of its European car assembly plants to other car manufacturers during the world recession (economic downturn) in 2009. Which economic reason would have been most likely to influence this decision?

Ato benefit from horizontal integration of manufacturing

Bto diversify and expand its product range

Cto encourage vertical integration of sales and production

Dto reduce its excess capacity in car production

✓ Correct answer

D: to reduce its excess capacity in car production

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Topic: Microeconomic decision makers, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, Oct/Nov 2011 Paper 1 Variant 1, question 20.

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