The idea that the production function exhibits-------------implies that-------------
A) increasing returns; potential GDP is always increasing.
B) constant returns; each additional unit of labor employed generates an increasing amount of real GDP.
C) diminishing returns; each additional unit of labor employed generates an ever-decreasing amount of real GDP.
D) increasing returns; output should increase steadily as technology grows.
E) diminishing returns; the Lucas Wedge increases at output increases.
Correct Answer:
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