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.

D

Economics

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Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.

A. lower; potential B. higher; potential C. higher; higher D. lower; higher

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