When the Marginal Product of Labor Rises

question 133

Multiple Choice

When the marginal product of labor rises,

• A)the marginal cost of production will exceed the average total cost.
• B)the marginal cost of production also rises.
• C)the marginal cost of production falls.
• D)the average total cost of production also rises.

---

Definitions:

Fed Officials

Members of the Federal Reserve, the central banking system of the United States, who are responsible for monetary policy decisions.

Rational Expectations Theory

A hypothesis proposing that individuals form forecasts about the future based on all available information in an unbiased and consistent manner.

Aggregate Output

Aggregate Output is the total value of all goods and services produced in an economy over a given period of time.

Active Policy

A government policy aimed at reducing unemployment and stimulating economic growth through proactive measures like tax cuts or increased government spending.