"Diminishing Marginal Returns" Refer to a Situation in Which the

question 376

Multiple Choice

"Diminishing marginal returns" refer to a situation in which the

• A) marginal cost of the next worker hired is less than the marginal cost of the previous worker hired.
• B) average cost of the next worker hired is less than the average cost of the previous worker hired.
• C) marginal product of the next worker hired is less than the marginal product of the previous worker hired.
• D) average product of the next worker hired is less than the average product of the previous worker hired.

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Definitions:

Medium of Exchange

is an intermediary instrument used to facilitate the sale, purchase, or trade of goods and services between parties.

Money Multiplier

The ratio of the amount of money created by the banking system through loans and deposits to the amount of money injected into the economy by the central bank.

Money Multiplier

The ratio of the amount of deposits created by banks to the amount of the central bank's monetary base that has been injected into the economy.

100-percent-reserve Banking

A banking system in which banks keep the full amount of their depositors' funds in reserve, meaning they do not loan out any of the deposits but instead hold 100% of deposited money.