- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 9. Economic Growth
- Subject 3. Production Function and Growth Accounting
CFA Practice Question
The law of diminishing returns states that if a given number of hours of labor use more capital (with the same technology), then the
B. additional output that results from the additional capital gets smaller as the amount of capital increases.
C. total output that results from the additional capital gets smaller as the amount of capital increases.
A. additional output that results from the additional capital gets larger as the amount of capital increases.
B. additional output that results from the additional capital gets smaller as the amount of capital increases.
C. total output that results from the additional capital gets smaller as the amount of capital increases.
Correct Answer: B
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