The Soviet Union Consistently Increased the Amount of Capital Available

question 183

Multiple Choice

The Soviet Union consistently increased the amount of capital available to its workers,but found that increases in capital resulted in progressively smaller and smaller increases in GDP per worker.This phenomenon is referred to as

• A)a rising standard of living.
• B)diminishing returns to capital.
• C)new growth theory.
• D)a shift of the per-worker production function.

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Definitions:

Subordinated Debt

A class of debt which ranks below other debts with regard to claims on assets or earnings.

Priority of Repayment

A hierarchy or order in which obligations and debts are to be paid, particularly relevant in bankruptcies and when liquidating assets.

Bond Indenture

A legal document specifying the terms and conditions under which a bond is issued.

Sinking Fund

A Sinking Fund is a fund established by an issuer of a bond to repay the principal amount of the bond at maturity, usually by setting aside funds over a period of time.