Which incentive scheme would simultaneously elicit accurate information about feasible plant production levels and motivate managers to perform up to potential (in the following schemes, B is the bonus payment, Q is actual plant output, and Qf is the
manager's estimate of feasible output)? A) B = 0.4Q
B) B = 0.4(Q - Qf)
C) B = 0.4Qf + 0.3(Q - Qf) if Q > Qf
D) B = 0.4Qf - 0.6(Q - Qf) if Q < Qf
E) B = 0.4Qf - 0.6(Q - Qf) if Q > Qf
C
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As wages for manufacturing workers rise, wages for service workers will stay the same.
Answer the following statement true (T) or false (F)
An open economy has GDP of $1,200 billion, consumption expenditures of $900 billion government expenditures of $400 billion, domestic investment of $100 billion, and net exports of -$200 billion. What is its demand for loanable funds?
a. -$200 billion b. -$100 billion c. $100 billion d. $200 billion
The monetary policy tool that involves the buying and selling of government bonds is
A) moral suasion. B) reserve requirements. C) the discount rate. D) open-market operations.
Inflation is
A. a rise in the price of every good and service. B. a rise of exactly a specified percentage in the price of every good or service. C. a rise in the average price level. D. a rise in average prices of at least 10 percent a year.