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Author Question: Evaluate the following statement. If marginal product is falling it will bring down the average ... (Read 27 times)

Medesa

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on: Jun 29, 2018
Evaluate the following statement. If marginal product is falling it will bring down the average product.
 
  What will be an ideal response?

Question 2

A one-time tax rebate, which is not expected to be extended in future years, will
 
  A) have a significant positive effect on consumption and aggregate demand, with aggregate demand growing by a multiple of the tax rebate.
  B) have no effect on consumption and aggregate demand.
  C) increase aggregate supply and aggregate demand.
  D) have a moderately positive effect on consumption and aggregate demand.


eliasc0401

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Reply #1 on: Jun 29, 2018
Answer to Question 1

This statement is not necessarily true. If marginal product is falling but still above average product then the average product will rise. However, if it is below average product then indeed it will bring average product down with it.

Answer to Question 2

D


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