The Functional Finance Philosophy Is Based on the Idea That

question 3

True/False

The functional finance philosophy is based on the idea that balancing the federal budget is less important than using it to promote an economy operating at its potential.

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Definitions:

Decreasing Returns

A principle where an increase in the amount of one factor of production, while other factors are held constant, results in a lower ratio of output per input.

Diminishing Returns

A principle stating that if one factor of production is increased while others are held constant, the incremental output will eventually decrease.

Scale

The size or level of something, often used to describe the scope of a business operation or production.

Increasing Returns

A situation in production where the output increases by a proportion greater than the increase in inputs, often leading to economies of scale.