________ is an income measured in terms of the goods and services it can buy; real income changes when the price changes?

According to John Maynard Keynes, policy makers should respond to a downturn in the business cycle by:

A. Cutting taxes and increasing government spending. B. Cutting taxes and reducing government spending. C. Raising taxes and increasing government spending D. Raising taxes and reducing government spending E. Do nothing because government activism violates Keynes' laissez faire approach.

Over a five-year span, the ABC Co reduced the amount of labor it hired. At the same time, the marginal productivity of labor increased. Which of the following COULD explain this observation?

A) the law of diminishing marginal returns B) labor saving technical change C) organizational innovation D) All of the above.