A Small Country's Aggregate Production Function Per Hour of Labor

question 71

Multiple Choice

A small country's aggregate production function per hour of labor is given by Y = K1/2. Its depreciation rate is 5 percent and its investment rate is 25 percent. What is its steady-state level of real GDP?

• A) 25
• B) 5
• C) 1.25
• D) You need to know the steady-state level of capital stock to answer this question.

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Definitions:

Cooperation

The act of working together towards a common goal or interest, often involving shared resources or efforts.

Self-Managing Employer Teams

Groups of employees who are given the authority and responsibility to manage themselves without direct supervision.

Decision Making

The cognitive process of selecting a course of action from multiple alternatives to achieve a desired goal.

Labor Relations

The ongoing relationship and interactions between employers and their workforce, often in the context of unions and collective bargaining.