Frito Lay experienced a 20% drop in its sales. Even though the demand for its product decreased, Frito Lay did not cut the wages of its nonunionized workers. This is an example of
A. an implicit or social contract not to cut wages.
B. an explicit contract not to cut wages.
C. poor management.
D. employment-at-will.
Answer: A
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The fundamental identity of national income accounting implies ________
A) Expenditure = Production + Income B) Expenditure = Production = Income C) Income = Expenditure - Production D) Income = Expenditure / Production E) None of the above
Which of the following is an advantage of open market operations over other Federal Reserve policy tools?
a. Use of the other tools must be approved by the President. b. Use of the other tools must be approved by Congress. c. Open market operations are more precise. d. Open market operations do not change interest rates. e. The U.S. Treasury and the Fed work together to undertake open market operations.
What is the difference between wealth and life-cycle wealth?
The political incentive structure tends to
a. encourage a balanced budget regardless of economic conditions. b. discourage budget deficits during recessions. c. encourage budget surpluses during both recessions and expansions. d. encourage budget deficits during both recessions and expansions.