Because marginal revenue product reflects productivity, decreases in productivity directly shift
A. input demand curves to the left.
B. input supply curves to the right.
C. input supply curves to the left.
D. input demand curves to the right.
Answer: A
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Bookkeeping
Assuming no change in the effective tax rate on capital, an increase in the government budget deficit will reduce the current account deficit if and only if the increase in the budget deficit
A) reduces desired national saving. B) increases desired national saving. C) reduces desired national investment. D) increases desired national investment.
Free trade may lead to more pollution because
A. with free trade, the size of the economy increases resulting in higher production and consumption. B. competition among nations invariably leads to less restrictive pollution standards. C. imported products are produced using cleaner production techniques than domestic products. D. the countries may not specialize in the production of goods in which they have comparative advantage.
Changes in the federal funds rate influence the economy's growth rate through all of the following except by:
A. making it more or less expensive to borrow. B. making investment spending more or less attractive. C. altering the real interest rate when inflation is changing quickly. D. making it more or less attractive to people save.