What Is the Law of Diminishing Marginal Productivity? The law of diminishing marginal productivity is an economic principle usually considered by managers in productivity management. Generally, it states that advantages gained from slight improvement on the input side of the production equation will only advance marginally per unit and may level off or even decrease after a
What Is Lawful Money? Lawful money is any form of currency issued by the United States Treasury and not the Federal Reserve System. It includes gold and silver coins, Treasury notes, and Treasury bonds. Lawful money stands in contrast to fiat money, in which the government assigns value although it has no intrinsic value of
What Is the Law of Diminishing Marginal Returns? The law of diminishing marginal returns is a theory in economics that predicts that after some optimal level of capacity is reached, adding an additional factor of production will actually result in smaller increases in output. For example, a factory employs workers to manufacture its products, and
What Is the Law of Diminishing Marginal Utility? The law of diminishing marginal utility states that all else equal, as consumption increases, the marginal utility derived from each additional unit declines. Marginal utility is the incremental increase in utility that results from the consumption of one additional unit. “Utility” is an economic term used to
What Is the Law of Large Numbers? The law of large numbers, in probability and statistics, states that as a sample size grows, its mean gets closer to the average of the whole population. This is due to the sample being more representative of the population as the sample become larger. In a financial context
What Is the Law of Supply? The law of supply is the microeconomic law that states that, all other factors being equal, as the price of a good or service increases, the quantity of goods or services that suppliers offer will increase, and vice versa. The law of supply says that as the price of
What Is the Law of One Price? The law of one price is an economic concept that states that the price of an identical asset or commodity will have the same price globally, regardless of location, when certain factors are considered. The law of one price takes into account a frictionless market, where there are
Lawrence R. Klein was an American economist who won the Nobel Memorial Prize in Economic Sciences in 1980 for his work building statistical models, eventually dubbed the Wharton models, that more accurately forecast economic activity such as gross national product, exports, investment, and consumption. Key Takeaways Lawrence Klein was an American economist who won the
What Is a Layoff? A layoff is the temporary or permanent termination of employment by an employer for reasons unrelated to the employee’s performance. Employees may be laid off when companies aim to cut costs, due to a decline in demand for their products or services, seasonal closure, or during an economic downturn. When laid
What Was an L Bond? An L bond was a high-yielding debt instrument that financed the purchase of life insurance policies on the secondary market. A type of privately issued, alternative investment, L bonds were created by Dallas-based financial services firm GWG Holdings, which ceased selling them on April 16, 2021. Key Takeaways The L
