Scenario: Two Economies, a and B, Have Identical Aggregate Production

question 63

Multiple Choice

Scenario: Two economies, A and B, have identical aggregate production functions with diminishing returns. In both economies, capital and labor are equally important for production. Economy A has twice as many efficiency units of labor as economy B. Economy B has twice as much physical capital stock as economy A.
-Refer to the scenario above.If population doubles and GDP remains unchanged,the economies' ________.

• A) GDP per capita will increase
• B) average standard of living will decrease
• C) income per capita will remain unchanged
• D) productivity will increase

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