Country A and country B both increase their capital stock by one unit. Output in country A increases by 12 while output in country B increases by 15. Other things the same, diminishing returns implies that country A is
a. richer than Country B. If Country A adds another unit of capital, output will increase by more than 12 units.
b. richer than Country B. If Country A adds another unit of capital, output will increase by less than 12 units.
c. poorer than Country B. If Country A adds another unit of capital, output will increase by more than 12 units.
d. poorer than Country B. If Country A adds another unit of capital, output will increase by less than 12 units.
b
4. If a firm wants to borrow it can
a. supply bonds by selling them. c. supply bonds by buying them.
b. demand bonds by selling them. d. demand bonds by buying them.
