Imagine you own a business and that during the next recession you lay off 20 percent of your workforce. Once economic activity picks up and your sales begin to increase, why might you not immediately start rehiring workers?

A. Before rehiring you would like to make sure that this economic expansion lasts.
B. Due to inflation that occurs during an economic recovery, you will have to pay higher wages to new workers
C. To better protect your self from a future recession, you would like to use more capital intensive technology
D. You would like to recover your profit that you lost during the recession and would not like to increase labor cost.


Answer: A. Before rehiring you would like to make sure that this economic expansion lasts.

Economics

You might also like to view...

If the unemployment rate has reached an all-time high, the production of output is probably

a. high b. low c. stable d. fluctuating e. equal to its potential

Economics

Charlie is getting a divorce. He selects a female lawyer at a large law firm because he believes they are more aggressive in obtaining favorable settlements in divorce cases. Charlie's behavior is an example of ________ discrimination.

A. employee B. market C. employer D. customer

Economics

Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 

A. D; C B. B; C C. B; A D. D; B

Economics

Using the information in the table above, what does GDP equal?

A) $365 billion B) $350 billion C) $650 billion D) $380 billion E) GDP cannot be calculated without information on the amount of investment.

Economics