Use the following graph to answer the questions. In each case, briefly explain your answer.

a. True or false: The movement from point A to point B shows the effects of technological change.
b. True or false: The economy can move from point B to point C only if there are no diminishing returns to capital.
c. True or false: To move from point A to point C, the economy must increase the amount of capital per hour worked and experience technological change.

Transcribed Image Text:

Real GDP per hour worked, YIL Production function3 $75 Production function 65 в Production function, 55 $140 160 Capital per hour worked, K/L