Author Question: Consider a two-input production function, one of which is increasing while the other is fixed. At ... (Read 82 times)

JGIBBSON · **on:** Jun 30, 2018

Consider a two-input production function, one of which is increasing while the other is fixed. At the point of diminishing returns, output will

A) increase at an increasing rate. B) decrease at a decreasing rate.
C) decrease at an increasing rate. D) increase at a decreasing rate.

Question 2

How do specialized lending channels created by central banks affect the economy during a recession?

What will be an ideal response?

tuwy · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

D

Answer to Question 2

Central banks occasionally invent additional ways of increasing the supply of credit during financial crises by creating specialized lending channels. These increase lending in the credit market and thus indirectly increase the demand for goods, services, and labor.