Diminishing Returns to Capital Implies That

question 270

Multiple Choice

Diminishing returns to capital implies that:

• A) the marginal product of capital is decreasing.
• B) more capital produces less output.
• C) the production function is downward sloping.
• D) capital is not the most efficient input.

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Definitions:

Risk-Free Rate

The assumed yield an investment would generate if it carried no risk, often indicated through government bond yields.

Inflation Rate

The velocity at which the comprehensive price index for goods and services rises, lessening monetary value.

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An amount of money paid by one party to another in exchange for goods, services, or to fulfill a contractual obligation.

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The currency of Canada, symbolized as CAD or C$, which is a benchmark currency used within the country and in international exchanges.