According to the Law of Diminishing Returns, Along the Aggregate

question 36

Multiple Choice

According to the law of diminishing returns, along the aggregate production function, an additional unit of

• A)capital produces more output than an additional unit of labour.
• B)labour decreases output.
• C)labour produces more output than the previous unit.
• D)labour produces less output than the previous unit.
• E)labour increases the real wage rate.

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Definitions:

Floating-Rate Bonds

Bonds with variable interest rates that adjust periodically based on a benchmark or index rate.

Future Interest Rates

Future interest rates refer to the anticipated rates at which borrowers will be charged for loans or the return investors will earn on deposits, based on predictions.

Increase

A rise in the quantity or value of something, such as profits, revenue, weight, etc.

Put Provision

A clause in a bond or other security that allows the holder to force the issuer to buy back the security before its maturity date.