Why would a company be more enthusiastic in providing more training to its workers during an economic downturn than during an economic boom (assuming that they do not layoff their workers and can keep them when the economy recovers)?
What will be an ideal response?
During an economic downturn the opportunity cost of training workers is likely to be much smaller in terms of lost production. However, during an economic boom the costs are much larger because while employees are being trained they are not producing and selling as much output as they otherwise could if they were performing their normal duties.
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A firm's cost of production is determined by all of the following except
A) the productivity of its workers. B) the amount of corporate taxes it must pay on its profit. C) the technology used to produce its output. D) the cost of raw material used in production.
If investment increases by $100 and, as a result, gross domestic product (GDP) ultimately increases by $200, the multiplier equals _____
a. 1 b. 2 c. 3 d. 4 e. 5