Since there are diminishing returns to the removal of further trade barriers, economists do not favor further negotiations

Does this production function, q = 10L0.5K0.3, experience increasing, decreasing or constant returns to scale?

A) Decreasing because a 100% increase in inputs increases outputs by 80%. B) Increasing because an 80% increase in inputs increases outputs by 100%. C) Decreasing because 0.5 + 0.3 < 1. D) A and C.

In the simple liquidity preference model, changes to the money supply will have a smaller effect on interest rates the:

A. steeper, more elastic is the money demand curve. B. flatter, more elastic is the money demand curve. C. flatter, less elastic is the money demand curve. D. steeper, less elastic is the money demand curve.