Diminishing marginal returns occur when:
A) units of a variable input are added to a fixed input and total product falls.
B) units of a variable input are added to a fixed input and marginal product falls.
C) the size of the plant is increased in the long run.
D) the quantity of the fixed input is increased and returns to the variable input fall.
B
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When the interest rate decreases, the amount of loanable funds demanded in the market:
a) decreases; this causes a movement up and to the left along the demand curve. b) increases; this causes a movement down and to the right along the demand curve. c) decreases; the entire demand curve shifts left. d) increases; the entire demand curve shifts right.
Real business cycle theorists are critical of monetarist reduced-form evidence because they believe
A) money is the most important cause of changes in aggregate demand. B) there is reverse causation from the business cycle to money. C) there is reverse causation from money to the business cycle. D) business cycles do not exist.