Scenario: Two Neighboring Countries, Sweetland and Sourland, Are Identical in Terms

question 79

Multiple Choice

Scenario: Two neighboring countries, Sweetland and Sourland, are identical in terms of size, population (800,000) , education of workforce, and value of natural resources owned.
-Refer to the scenario above.Over time,Sourland's aggregate production function shifts upward.Why might this be the case?

• A) More output can be produced with the same amount of physical capital stock and total efficiency units of labor.
• B) Research and development undermine the output of physical labor.
• C) The corporate tax rate has been reduced.
• D) The number of educated people in Sourland has increased.

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