1) Growth theory uses the aggregate production function (APF) to relate potential national income (long-run national income) to aggregate inputs: Y* = GDP = F(K, L, H).
a. What is does diminishing marginal product of capital mean?
b. Explain why diminishing marginal product of capital may not hold, and instead we could increasing marginal product of capital
c. Does growth in labor always result in increases in the standard of living measured as national income per worker? Briefly explain.
d. Choose any theory of economic growth and briefly explain how it works