When Aggregate Demand Declines, Some Firms May Reduce Employment Rather

question 43

Multiple Choice

When aggregate demand declines, some firms may reduce employment rather than wages because wage reductions may

• A)not be possible due to the minimum wage law.
• B)increase the cost of raising money capital.
• C)reduce the demands for their products.
• D)set off a price war.

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Definitions:

Virtual Organization

An organizational structure that operates through digital collaboration among geographically dispersed members, relying on technology rather than physical offices.

Information Technology

The use of computers, storage, networks, and other physical devices, infrastructure and processes to create, process, store, secure, and exchange all forms of electronic data.

Physical Space

The tangible, three-dimensional environment in which objects and events occur and have relative position and direction.

Company Culture

The unique combination of a company’s vision, values, norms, systems, symbols, language, assumptions, beliefs, and habits.