Question

Economic growth will A. not be affected because the key to economic growth is capital accumulation whether there are diminishing returns or not. B. be faster if more capital per hour is used because of increasing returns to capital. C. not be sustained if developing countries stop accumulating capital because of diminishing returns to capital. D. slow down or stop if more capital per hour is used because of diminishing returns to capital.

Answer 1

Answer:

Option D.

Explanation:

Slow down or stop if more capital per hour is used because of diminishing returns to capital, is the right answer.

Economic growth is the rise in the inflation-adjusted exchange price of the goods and services produced by an economy over the period. It is measured as the % of the rise in the real GDP.

The law of diminishing returns is popularly applied to as the law of diminishing marginal returns, affirms that in the process of production, as one input variable is improved, a spot will appear at which the marginal every unit production will begin to decrease if all other factors remain same.