Figure 12.1 -The Movement from a to B to C in Figure

question 42

Multiple Choice

Figure 12.1
-The movement from A to B to C in Figure 12.1 illustrates

• A) an improvement in technology.
• B) a decline in capital per worker.
• C) diminishing returns to capital.
• D) diminishing returns to labour.

---

Definitions:

Debt

An amount of money that is owed by one party to another, usually as a result of borrowing.

Tax Rate

Tax rate is the percentage at which an individual or corporation is taxed by the government on their income, assets, or transactions.

Financial Leverage

The strategy of using loans to increase the prospective benefits of an investment.

Debt/Equity Ratio

A gauge for comparing the mix of a company's funding through shareholders' equity versus debt, frequently applied to understand the company's use of financial leverage.