When a Production Function Is Graphed with Real GDP on the Vertical

question 53

Multiple Choice

When a production function is graphed with Real GDP on the vertical axis and labor on the horizontal axis,a rise in labor ________________________which shifts the LRAS curve ____________ resulting in ______________________.

• A) shifts the production function up; rightward; economic growth
• B) shifts the production function down; leftward; a shrinking economy
• C) moves us up along a given production function; rightward; economic growth
• D) moves us down along a given production function; leftward; a shrinking economy

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Definitions:

Market Portfolio

A theoretical portfolio comprising all assets in the market, with each asset weighted by its market capitalization, representing the entire stock market's performance.

Risk-free Rate

The rate of return on an investment with zero risk, typically based on government bonds.

Dividend Increase

A company's decision to raise the amount of dividends paid to its shareholders, often viewed as a positive signal of the company's profitability and future prospects.

Required Return

Required return is the minimum annual percentage earned by an investment that will induce individuals or companies to put money into a particular security or project.