Let the Production Function Be Q = AL^aK^b

question 59

Multiple Choice

Let the production function be q = AL^aK^b. The function exhibits constant returns to scale if

• A)a + b = 1.
• B)a + b > 1.
• C)a + b < 1.
• D)Cannot be determined with the information given.

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Definitions:

Structural Unemployment

A form of unemployment caused by fundamental changes in the economy that result in a significant mismatch between the skills workers offer and the skills demanded by employers.

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