Suppose That There Are Diminishing Returns to Capital

question 16

Multiple Choice

Suppose that there are diminishing returns to capital.Suppose also that two countries are the same except one has less capital and so less real GDP per person.Suppose that both increase their saving rate from 3 percent to 4 percent.In the long run

• A)both countries will have permanently higher growth rates of real GDP per person,and the growth rate will be higher in the country with more capital.
• B)both countries will have permanently higher growth rates of real GDP per person,and the growth rate will be higher in the country with less capital.
• C)both countries will have higher levels of real GDP per person,and the temporary increase in growth in the level of real GDP per person will have been greater in the country with more capital.
• D)both countries will have higher levels of real GDP per person,and the temporary increase in growth in the level of real GDP per person will have been greater in the country with less capital.

Recognize the importance of patents and other forms of legal protection for inventions and innovations.

Identify the significance of corporate culture in fostering innovation and setting ambitious goals.

Understand the global influence of innovation and the necessity of understanding and adapting to local market problems.

Understand the concepts of assets, liabilities, and equity within the context of the balance sheet.

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Definitions:

Increase of Fear

A situation where the level of anxiety, worry, or dread in a population or individual grows significantly, often in response to real or perceived threats.

Second Bank of the United States

A federal institution that operated from 1816 to 1836, aimed at stabilizing and improving the national economy but faced opposition, leading to its closure.

Dred Scott Decision

A landmark 1857 U.S. Supreme Court case that ruled African Americans, whether enslaved or free, could not be American citizens and had no rights to sue in federal court.

Slavery Expansion

The broadening of territories and jurisdictions where slavery was legal, particularly seen in the 19th-century United States.