PRICES: Anatomy of an Inchback

During a week of continued trouble for the U.S. economy (see box), President Ford's fledgling anti-inflation program won one small psychological victory. In a surprise return to old-style jawboning, the President, on the fourth day of his Administration, had rebuked General Motors for announcing price increases on 1975 model cars averaging a sizzling 9.6%, or about $480 an auto. For a while it seemed that he would be ignored. But last week, after ten days of public stonewalling, the world's largest automaker grudgingly relented—at least a bit.

GM shaved $64 off the...

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