Because of diminishing returns,an economy can continue to increase real GDP per hour worked only if
A)there are decreases in human capital.
B)the per-worker production function shifts downward.
C)there continues to be decreases in capital per hour worked.
D)there is technological change.

Question

Quizplus · Accepted Answer

Diminishing returns means that as more inputs (capital, labor, etc.) are added, the additional output produced by each additional input decreases. Therefore, to continue increasing real GDP per hour worked, an economy needs to introduce technological change that increases productivity and allows for more output to be produced with the same inputs. A decrease in human capital or capital per hour worked would actually decrease productivity and real GDP per hour worked.

Because of Diminishing Returns,an Economy Can Continue to Increase Real