Give a counterargument to each of the following usual answer

Give a counterargument to each of the following “usual answers” as to why American manufacturing is in decline:

a) Growth of governmental regulation, taxes, and so forth.

b) Advent of unusually high capital costs caused by high inflation.

Solution

A) Governmental regulations and taxes etc. often make manufacturing processes to undergo several changes to match with the current regulations. Taxes also increase the Operating expenditure (OPEX) and hence decreases the profit margin. This contributes to the decline in manufacturing industry.

B) With the advent of unusually, high capital cost caused by inflation increases the capital expenditure (CAPEX). Thus it plays a negative role in setting up a manufacturing industry or expanding an industry.