As an economy recovers from a recession, the observed level of labor productivity tends to decline. Why?
A) The total product remains the same during the recovery, but the number of workers declines.
B) The total product increases during the recovery, but the number of workers declines.
C) The marginal product of labor declines as new workers enter the expanding work force.
D) The marginal product of labor increases at a slower rate than the decline in employment.
C
You might also like to view...
Factors that led to worsening conditions in Mexico's 1994-1995 financial markets include
A) failure of the Mexican oil monopoly. B) the ratification of the North American Free Trade Agreement. C) increased uncertainty from political shocks. D) decline in interest rates.
How can a proportional tax achieve vertical equity?
In the basic Keynesian model, an increase in government purchases:
A. increases potential output. B. increases short-run equilibrium output. C. reduces short-run equilibrium output. D. reduces potential output.
If apples have an own price elasticity of ?1.2 we know the demand is:
A. unitary. B. elastic. C. inelastic. D. indeterminate.