Use the Figure Below to Answer the Following Questions

question 47

Multiple Choice

Use the figure below to answer the following questions.

Figure 24.5.1
-Refer to Figure 24.5.1. Everything else remaining the same, which graph best shows an increase in real GDP?

• A)(a)
• B)(b)
• C)(c)
• D)(d)
• E)(a)and (c)

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Definitions:

Fixed Inputs

Inputs in the production process that cannot be easily increased or decreased in the short run, such as land or machinery.

Variable Inputs

Resources used in production that can vary in quantity in the short run, such as labor and raw materials.

Diminishing Returns

A principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot continue to increase if other inputs remain constant.

Fixed Inputs

Resources used in production that cannot be easily increased or decreased in the short term, such as buildings or machinery.