In Figure 16-1

question 6

Multiple Choice

In Figure 16-1.The move from point A to point B represents the _____ of an input price change.

• A)substitution effect
• B)output effect
• C)income effect
• D)effect of diminishing returns

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Definitions:

Public Investment

Expenditure by the government on capital projects like public infrastructure, education, and health facilities that are intended to improve a country's economic capacity and well-being.

Replacement Investment

Expenditures made to replace worn-out or outdated capital goods to maintain productive capacity.

Gross Investment

The total amount of investment in capital goods in an economy over a specific period, not accounting for depreciation.

Depreciation

A reduction in the value of an asset over time due to wear and tear or obsolescence.