Even Though Explicit Contracts May Lead to Layoffs During Recessions

question 53

Multiple Choice

Even though explicit contracts may lead to layoffs during recessions, explicit contracts may still be efficient because such contracts

• A) guarantee that only the least-productive workers will be laid off.
• B) reduce unemployment effects.
• C) reduce negotiation costs.
• D) will equitably spread the layoffs among junior and senior workers.

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Definitions:

Nominal Scale

A scale of measurement in which numbers are arbitrarily assigned to represent different categories or variables. The only math that can be applied to these numbers is calculation of the mode.

Arbitrarily Assigned

Assignments or classifications made without any specific criteria or reason, relying on random choice.

Interval Scale

A scale of measurement in which there are equal distances between measurements but no absolute zero reference point.

Equal Distances

In mathematics and statistics, a concept where the separation between points or values in a sequence or scale is consistent across the sequence.