If One of the Primary Factors of Production Is Held

question 15

Multiple Choice

If one of the primary factors of production is held constant, two-dimensional production functions typically have a curved shape that reflects the ____________ of the factor that is being allowed to vary.

• A)increasing rate of saving
• B)diminishing marginal productivity
• C)increasing nominal GDP
• D)diminishing marginal utility

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Definitions:

Fed

The Federal Reserve System, which is the central bank of the United States responsible for monetary policy.

Money Supply

represents the total amount of monetary assets available in an economy at a specific time, including cash, coins, and balances held in bank accounts.

Interest Rates

The financial charge, calculated as a fraction of the principal, imposed by a lender on a borrower for asset use.

Monetary Multiplier

The ratio of the change in the money supply to the change in reserves, indicating the potential increase in money supply through the banking system.