In the Solow Model,saving and Investing in Additional Factories and Computers

question 37

Multiple Choice

In the Solow model,saving and investing in additional factories and computers does __________ .But in the long-run,the __________ accumulation leads the return to these investments to fall.

• A)lead output to grow in the medium run;diminishing returns to capital
• B)lead output to grow in the long run;increasing returns to capital
• C)lead output to grow in the medium run;increasing returns to capital
• D)not lead output to grow in the medium run;diminishing returns to capital
• E)not lead output to grow in the long run;diminishing returns to capital

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Definitions:

Average Payments

The mean amount paid over a defined period payments.

Average Daily Float

The average amount of uncollected funds represented in checks or other negotiable instruments over a specified period.

Lockbox System

A service provided by banks to accelerate collection of payments by having those payments sent to a special post office box rather than to the company.

Treasury Bills

Represent short-term government securities issued at a discount from the par value and mature without interest payments.