"When Workers Have a Relatively Small Quantity of Capital to Use

question 128

Multiple Choice

"When workers have a relatively small quantity of capital to use in producing goods and services,giving them an additional unit of capital increases their productivity by a relatively large amount." This statement

• A)is an assertion that production functions have the property of constant returns to scale.
• B)is consistent with the view that capital is subject to diminishing returns.
• C)is inconsistent with the view that it is easier for a country to grow fast if it starts out relatively poor.
• D)All of the above are correct.

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Definitions:

Bond Discount

The difference between the bond's face value and its selling price when the bond is sold for less than its face value.

Premium on Bonds

The amount by which the price paid for a bond exceeds its face value, typically because the interest rate it pays is higher than the market rate.

Maturity

The date on which a debt or other borrowing is due to be repaid in full, or when an investment reaches its full value.

Bond's Discount

The difference between the face value of a bond and its selling price when sold for less than its face value.