Which of the Following Statements Is TRUE

question 43

Multiple Choice

Which of the following statements is TRUE?

• A)the debt-to-GDP ratio can never exceed 100 percent
• B)if GDP and the national debt both increase, then the debt-to-GDP ratio cannot change
• C)whenever the budget deficit increases, the debt-to-GDP ratio also increases
• D)the debt-to-GDP ratio will always decrease as long as GDP is growing
• E)none of the above

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Definitions:

Diminishing Returns

The principle stating that as one factor of production is increased while others are held constant, a point will eventually be reached where additions of the factor yield progressively smaller increases in output.

Value Added

The increase in worth of a product or service as a result of a particular stage of production or as it moves through the supply chain.

Marginal Product

The increase in output resulting from a one-unit increase in the amount of a single input used, keeping all other inputs constant.

Premium

A premium is the amount paid for an insurance policy, representing the price for the insurance coverage or the amount over the nominal value of something.