All Else Equal,if There Are Diminishing Returns,then If a Country

question 10

Multiple Choice

All else equal,if there are diminishing returns,then if a country raised its capital by 100 units last year and by 100 units this year,

• A)the increase in output was greater for this year than last year.
• B)the increase in output was greater last year than this year.
• C)the increase in output is the same in both years.
• D)None of the above is necessarily correct.

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Definitions:

Discount Rate

For the purpose of discounted cash flow analysis, this rate of interest is key in determining the existing value of forthcoming cash flows.

Operating Costs

Expenses related to the day-to-day functions of a business, excluding direct materials and direct labor costs.

Donut Maker

A kitchen appliance or tool specifically designed for making donuts.

Simple Rate of Return

A calculation that measures the profitability of an investment as a percentage of the original investment, ignoring the time value of money and other factors like cash flows over time.