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An Aggregate Production Function Exhibits Increasing Returns to Capital When

Question 56

Multiple Choice

An aggregate production function exhibits increasing returns to capital when


A) a one percent decrease in capital produces an increase in the marginal product of capital.
B) each additional unit of capital increases the number of jobs by more than one percent.
C) a one percent increase in capital produces no change in output.
D) no change in capital produces a one percent increase in output.
E) each additional unit of capital has a higher marginal product than the previous unit.

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