Question

The hourglass Hypothesis was a theory that Citibank's investor analyst's prediction that over time that investors would see greater returns from companies that seek to service the upper class and lower class consumers. This is due to a middle class being " squeezed". the theory came out in 2012 and for the most part has occurred.

True

False

Answer 1

ANSWER- the correct answer is;

TRUE

Citigroup uses the hourglass theory to guide stock purchasing decisions for the coming year. They predict that companies targeting the low-range consumer will do better than those that target the mid-range consumer. Examples of companies that are expected to do well in the recession include Dollar General, Hanesbrands, and Kraft Foods. But beyond stock predictions and consumer choices, there are a few truly tangible possibilities for corporations as the middle class continues to be squeezed.

However, the current recession has continued to change profit expectations in most industries. Practor & Gamble (P&G), a mainstay in many middle-class homes, is taking notice. Research has shown that their customers are trading down to lower cost products and P&G is beginning to offer bargain priced options in the United States. What it really means is that P&G is betting customer responses to the current economic situation will persist.