With Respect to Long-Run Economic Growth,one Rationale for the Idea

question 128

Multiple Choice

With respect to long-run economic growth,one rationale for the idea that there may be increasing marginal returns to investment is that

• A)as further investment takes place the economy moves down to the right along the marginal product schedule.
• B)as further investment takes place the economy moves upward to the left along the marginal product schedule.
• C)the investment costs to "followers" are lower than those for "pioneers."
• D)initial investment shifts the the investment demand schedule to the left,making further investment less costly.
• E)initial investment shifts the the aggregate demand schedule to the left,making further investment less costly.

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Definitions:

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against a fixed asset since it was put into service.

Statement of Cash Flows

A financial statement that provides aggregate data regarding all cash inflows and outflows a company receives from its operational, investing, and financing activities.

Operating Activities

The core activities that a business performs to earn revenue, including production, distribution, and sales processes.

Indirect Method

A technique used in cash flow statements to calculate net cash flows from operating activities by starting with net income and adjusting for non-cash transactions and changes in working capital.