In the basic closed-economy ISLM model, as the interest sensitivity of investment spending increases, fiscal policy has ________ effect on output and monetary policy has ________ effect on output

What is the ability-to-pay principle of taxation? List one strength and one weakness of the ability-to-pay principle as a guide to tax policy

What will be an ideal response?

Diminishing marginal returns occurs when:

a. the marginal product of a variable input diminishes with each additional unit of the input. b. the marginal product of a variable input increases with each additional unit of the input. c. the marginal product of a fixed input diminishes with each additional unit of the input. d. the marginal product of a fixed input increases with each additional unit of the input.