Data Driven Decision Making Kroger Groceries provides store managers flexibility to determine prices for a number of popular items they carry because demand is affected primarily by local conditions that managers are more aware of. To make sure managers
use this discretion wisely, managers are rewarded with bonuses based on quarterly sales. With improvements in data collection and analysis, the "quants" in corporate headquarters can run many small experiments. Doing so allows them to understand nuanced patterns in consumer demand that had been un-noticed previously. How does this affect manager compensation?
The new ability to mine the data by the "quants" represents a change in where the relevant information is located. Information that once was exclusively at the store level, is now available to corporate headquarters. It is likely, then, that more of the pricing decisions should be made where this information is becoming available. This means that managers need not be compensated for pricing decisions that are now out of their hands.
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The market where currencies may be bought and sold for immediate delivery is known as
A) the forward exchange market. B) the spot exchange market. C) the purchasing power market. D) the futuristic exchange market.
Economist John Maynard Keynes noted one of the main contributors to the Great Depression in the 1930s was:
A. insufficient spending causing below natural rate output. B. an insufficient agriculture sector, unable to produce enough food for the large US population. C. poor infrastructure for manufacturing. D. a labor market that could not meet the demands of the market at the time.
Opportunity cost: a. Always refers to the dollar price paid for a good
b. Always equals the best alternative value of the time spent in going to a concert or sporting event. c. Of any good is zero for any good that is given away free, if you wait in a line to get it. d. Increases when the best foregone alternative becomes more valuable.
If the Federal Reserve unexpectedly raised its interest rate target, which of the following would most likely occur?
a. The interest rate would increase and bond prices would rise. b. The interest rate would decrease and bond prices would rise. c. The interest rate would increase and bond prices would fall. d. The interest rate would decrease and bond prices would fall. e. The interest rate would increase but bond prices would not change.