For the law of diminishing returns to be present, we must have:
A. at least one factor of production to be fixed.
B. output decreasing as more laborers are hired.
C. the price of labor increasing as more workers are hired.
D. simultaneous changes in labor and capital.
Answer: A
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Approximately how often is the Consumer Price Index (CPI) market basket updated?
a. Every 10 years b. Every 25 years c. Every year d. Every 2 years e. Every 5 years
Fretonia and Libstien are the same except Fretonia has a larger capital stock. Both countries undertake policies that raise their saving rates to the same higher level. We would expect that
a. both countries would have permanent increases in their growth rates, but the increase would initially be larger in Fretonia. b. both countries would have permanent increases in their growth rates, but the increase would initially be smaller in Fretonia. c. both countries would have temporary increases in their growth rates, but the increase would be larger in Fretonia. d. both countries would have temporary increases in their growth rates, but the increase would be smaller in Fretonia.