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iren2701 [21]
3 years ago
10

Suppose that a 10 percent increase in the physical capital stock increases GDP by 10 percent. Nowconsider an additional 10 perce

nt increase in the physical capital stock.This increase in the physical capital stock will increase GDP by_________A. More than 10%B. less than 10%C. 10%
Business
1 answer:
Artyom0805 [142]3 years ago
7 0

Answer:

B. Less than 10%

Explanation:

An addition increase by 10 % in the physical capital stock (which is a factor of production consisting of man made goods like machineries and so on) will lead to a less than 10% increase in the Gross domestic product. This is due to the law of diminishing marginal utility which talks about the consumption increases marginal utility from each additional unit declines. Thus, the more the physical capital stock increases, the GDP will increase at a decreasing rate.

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Gordon and Hi-Tech Solutions

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2 years ago
A dry cleaner uses exponential smoothing to forecast equipment usuages at its main plant. August usage was forecasted to be 88 p
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3 years ago
Smith plumbing supply has completed a swot analysis. the company is in a good position financially and has decided to use some o
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3 years ago
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Easter Egg and Poultry Company has $1,040,000 in assets and $649,000 of debt. It reports net income of $120,000. a. What is the
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Answer:

A. 11.54%

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I hope my answer helps you

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3 years ago
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