To Have Long-Term Economic Growth, the Production Function Suggests

question 237

Multiple Choice

To have long-term economic growth, the production function suggests

• A) keeping interest rates high to encourage saving.
• B) increasing the availability of technology, capital, and labor.
• C) increasing government oversight of business decisions.
• D) redistributing income from the wealthy to the poor.

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Definitions:

Marginal Revenue

The heightened income realized from the sale of one more unit of a good or service.

Marginal Cost

The price involved in creating one more unit of a specific good or service.

Marginal Revenue

The additional income gained from selling one more unit of a good or service; it’s a critical concept for determining the optimal level of output for a firm.

Profit-maximizing Firm

A business entity whose primary goal is to generate the highest possible profit from its operations and investments.