Diminishing Returns to Physical Capital Means That, as More and More

question 260

True/False

Diminishing returns to physical capital means that, as more and more physical capital is added to fixed amounts of human capital with a fixed technology, eventually real GDP per worker declines.

---

Definitions:

Dollarization

The process of a country abandoning their currency and using U.S. Dollars or another currency instead.

Economic Inflation

A general increase in prices and fall in the purchasing value of money over time.

Buying Power

The ability of individuals or entities to purchase goods and services, often influenced by income levels, inflation, and market conditions.

Domestic Currency

The legal tender or currency that is circulated for use and accepted for exchange within the domestic economy of a country.