Let the level of planned output decline during an economic downturn. To illustrate the effects of this decline, you would expect to see the marginal benefit schedule for capital
A) shift up and to the right.
B) shift up and to the left.
C) shift down and to the right.
D) shift down and to the left.
E) move along the demand curve for labor to a lower level of employment.

Question

Quizplus · Accepted Answer

During an economic downturn, the level of planned output declines, leading to a decrease in the demand for capital. This would be illustrated by the marginal benefit schedule for capital shifting down and to the left, as firms perceive less benefit from additional capital investment due to lower expected returns.

Let the Level of Planned Output Decline During an Economic