The Below Figure Shows the Various Combinations of the Goods

question 89

Multiple Choice

The below figure shows the various combinations of the goods X and Y that yield different levels of utility.Figure 7.3

-Diminishing marginal returns means that as you combine more units of a variable resource with a set of fixed resources:

• A)the average physical product of the fixed inputs increases at an increasing rate.
• B)the marginal physical product of the variable input decreases.
• C)the total output decreases.
• D)the marginal physical product of the variable input increases at a constant rate.
• E)the marginal physical product of the variable input increases at a decreasing rate.

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Definitions:

Prime Rate

The interest rate that commercial banks charge their most credit-worthy customers, frequently used as a benchmark in lending rates.

Commercial Banks

Financial institutions that accept deposits, offer various loans, and provide other financial services to the public.

Open Market Operations

Central bank activities involving the buying or selling of government securities to control the money supply and interest rates.

Discount Rate

The interest rate set by central banks that is charged to commercial banks for loans, influencing monetary policy and the money supply.