Diminishing Returns to Physical Capital Means That as More and More

question 257

Multiple Choice

Diminishing returns to physical capital means that as more and more physical capital is combined with a fixed amount of human capital and a fixed technology, eventually:

• A) aggregate output or real GDP declines.
• B) aggregate output or real GDP grows.
• C) additions to aggregate output or real GDP decline.
• D) additions to aggregate output or real GDP increase.

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Definitions:

Reed Bank

A submerged reef in the South China Sea, known for its disputed territorial claims and rich natural resources.

Repossession

The process by which a creditor takes back property or goods from the borrower due to failure to make scheduled payments.

Defaulted

Refers to failing to fulfill a legal obligation, especially failure to pay a debt or appear in court as required.