The Production Function Displays

question 16

Multiple Choice

The production function displays

• A) increasing returns.
• B) diminishing returns.
• C) normal returns.
• D) real returns.
• E) average returns.

---

Definitions:

Required Rate

The minimum rate of return expected by investors on an investment or project.

Growing Annuity

An annuity that increases at a proportionate rate during the period of the contract, typically to combat inflation.

Annuity Growth Rate

The rate at which the value of an annuity investment increases over time.

Compounded Annually

A method of calculating interest in which the interest earned each year is added to the principal, so that the balance doesn't merely grow, it grows at an increasing rate.