The Production Function Shows That as Employment Increases,real GDP

question 11

Multiple Choice

The production function shows that as employment increases,real GDP

• A)increases at an increasing rate.
• B)increases at a decreasing rate.
• C)increases at a constant rate.
• D)decreases at a decreasing rate.
• E)increases until it reaches potential GDP and then it starts to decrease.

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Definitions:

Withdrawals

Amounts taken out from a business by its owner(s) for personal use, reducing the owner's capital account.

Net Income

The company's overall earnings following the deduction of all expenses and taxes from its total revenue.

Statement Of Owner's Equity

A report that summarizes the fluctuation in the equity of a business due to profits earned, dividends paid, and capital invested during a specific period.

Income Statement

A financial statement that shows the company's revenues and expenses over a specific period, culminating in the net income or loss for that period.