The law of diminishing returns refers to diminishing
A) total returns.
B) marginal returns.
C) average returns.
D) all of these.
B
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The commercial banking system has excess reserves of $200,000. Then new loans of $800,000 are subsequently made, and the system ends up just meeting its reserve requirements. The required reserve ratio must be
A. 30%. B. 10%. C. 25%. D. 20%.
Suppose the exchange rate changes so that more Japanese yen are required to buy a dollar. We could conclude that:
a. the Japanese yen has appreciated in value. b. U.S. citizens will buy more Japanese imports. c. Japanese will demand more U.S. exports. d. U.S. citizens will buy less Japanese imports.
If the marginal propensity to save (MPS) is 0.25, the value of the spending multiplier is:
a. 1. b. 2. c. 4. d. 9.
Bonds generally
A) are insured. B) have more risk than stock. C) have less risk than stock. D) have no value on secondary markets.