If the economy is characterized by constant returns to scale, then a
A) doubling of inputs will lead to a more than two-fold increase in output.
B) doubling of inputs will lead to a constant output.
C) doubling of inputs will lead to a two-fold increase in output.
D) doubling of inputs will lead to a less than two-fold increase in output.
C
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The multiplier is
A) the percentage of a given change in income that goes towards consumption. B) the number which is multiplied by an autonomous change which gives the change in the equilibrium level of real GDP. C) the part of consumption that is independent of the level of disposable income. D) the proportion of total disposable income that is consumed.
A open market purchase of government securities by the Fed will cause which of the following?
A) an increase in the equilibrium quantity of reserves B) a reduction in the federal funds rate C) an increase in the amount of excess reserves that banks will wish to hold D) all of the above