(Downsizing) During the late 1990s and the early 2000s, the financial press reported story after story regarding downsizing and layoffs. Often the stories involved companies that had multiple rounds of downsizing events.

Assume that you are a stock market analyst and are responsible for in¬ terpreting the economic significance of corporate layoffs. In general, would you interpret the layoffs as good news or bad news? Explain the rationale for your answer. LO.1