Which of the Following Explanations Is Consistent with the Decline

question 63

Multiple Choice

Which of the following explanations is consistent with the decline in productivity growth that followed the Great Recession?

• A) High levels of debt incurred prior to the Great Recession have hindered firms' ability to make productivity-enhancing investments.
• B) The Federal Reserve kept interest rates too high, stifling investments that would increase productivity.
• C) High levels of inflation following the Great Recession created too much uncertainty for firms, discouraging productivity-enhancing investments.
• D) Consumer demand following the Great Recession exceeded firms' capacity to satisfy that demand.

Calculate total fixed costs from given average total and average variable costs.

Understand the concept of marginal cost and its relationship with average costs.

Identify the conditions under which average variable and total costs increase or decrease.

Determine the output level that minimizes average variable costs.