Define returns to scale
Returns to scale summarize the response of a firm's output to equal percentage changes in all inputs. If all inputs are raised by equal percentages and output increases by a larger percentage, there are increasing returns to scale. Similarly, if all inputs are raised by equal percentages and output increases by a lesser percentage, there are decreasing returns to scale. If output changes by the same percentage as inputs, it implies constant returns to scale.
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Of the following, which is CORRECT?
A) Nominal GDP does not change when the production of goods and services increases. B) Nominal GDP is not affected by changes in prices of goods and services. C) Nominal GDP increases when the prices of goods and services increase. D) Real GDP changes only when the prices of goods and services really change.
A bond is a financial security that represents a promise to repay
A) a yearly interest payment and a principal payment. B) a yearly principal payment only. C) a yearly interest payment only. D) Bonds are investments that do not promise any kind of repayment.