Question

The owner of a national software company has been watching current economic information for the past two quarters and a rapid rise in demand for its software suites. Last month 30 new software engineers were hired to meet the demand. Even though these new hires will finish their project work in a few months, the owner plans to retain them in anticipation of future demand. Why is the owner making these type of decisions for the long-run

Answer 1

The owner is making this long-run decision based on his rational expectations of economic growth to meet future demands.

What are long term decisions?

They are a strategic process that means designing an economic scenario based on perspectives, vision and organizational goals, with short-run decisions being the actions present to achieve long-run objectives.

Therefore, the owner is making long-run decisions in line with his expectations for the future of the business by looking at the current economic scenario.

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