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Constant returns to scale |
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Constant returns to scaleA property of a production function such that scaling all inputs by any positive constant also scales output by the same constant. Such a function is also called homogeneous of degree one or linearly homogeneous. CRTS is a critical assumption of the H-O Model of international trade. Contrasts with increasing returns and decreasing returns.Similar MatchesConstant dollarsConstant dollarsDollars of constant purchasing power. That is, corrected for inflation. More precisely includes reference to a base year for comparison, e.g. "in constant 1992 dollars." Same as constant prices. Constant pricesConstant pricesSee constant dollars. Constant elasticity of substitution functionConstant elasticity of substitution functionSee CES function Constant ratio planConstant ratio planMaintaining a predetermined ratio between stock and fixed income investments through regular adjustments of distribution of funds into different investments. See: formula investing. Loan ConstantLoan ConstantThe yearly percentage of interest which remains the same over the life of an amortized loan, based on the monthly payment in relation to the principal originally loaned. For example: A $1000 loan at 9% interest for 20 years can be amortized at $9.00 per month. The constant interest rate is figured by finding one year's payments ($9.00 x 12 months = $108,00), and expressing this amount as a percentage of the principal originally borrowed (10.8% of $1000). Further SuggestionsConstant yield methodConstant growth model Constant dollar plan Constant dollars constant dollar plan |
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