In an Effort to Prevent Downsizing Its Employees, ABC Inc

question 60

Multiple Choice

In an effort to prevent downsizing its employees, ABC Inc. has asked its staff to accept reduced pay. What strategy is ABC Inc. using?

• A) furloughing
• B) employee leasing
• C) reduced downsizing
• D) outsourcing

---

Definitions:

Physical Capital

Assets that are tangible, such as machinery, buildings, and equipment, which are used in production to create other goods or services.

Production Function

A mathematical model that describes the relationship between inputs used in production and the output of goods or services.

Constant Returns

A situation in which the rate of increase in output is directly proportional to the increase in inputs in the production process.

Scale

The size or level of operation, indicating the scope or extent of something, often used in discussions of production or economic activities.