Which statement best explains why growth in China has been so rapid recently?
A. China began with very little capital, so its marginal product of capital was very low.
B. China began with very high capital, so its marginal product of capital was very low.
C. China began with very high capital, so its marginal product of capital was very high.
D. China began with very little capital, so its marginal product of capital was very high.
Answer: D. China began with very little capital, so its marginal product of capital was very high.
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Increases in the marginal product of labor can be attributed to:
A) specialization of workers. B) depreciation of capital. C) diminishing returns to workers. D) congestion and thus better use of work space.
The quantity of money demanded is positively related to the interest rate
Indicate whether the statement is true or false
Refer to Figure 16.1. An increase in the real interest rate is best represented by a movement from
A) point A to point B. B) point B to point A. C) point A to point C. D) point C to point A.
A change in the price of a good will shift the demand for labor producing that good
Indicate whether the statement is true or false