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In the Neoclassical Growth Model, the Law of Diminishing Marginal

Question 54

Multiple Choice

In the Neoclassical growth model, the law of diminishing marginal returns implies that capital accumulation leads to ever


A) larger decreases in GDP and large decreases in living standards.
B) smaller increases in GDP and living standards.
C) larger levels of unemployment but larger increases in the standard of living.
D) larger levels of unemployment but small increases in the standard of living.
E) larger increases in GDP but smaller decreases in living standards.

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