A Country Has an Aggregate Production Function of the Form

question 113

Multiple Choice

A country has an aggregate production function of the form Y = A × K¹/³ × H²/³,where Y denotes total output,A denotes the level of technology,K denotes the physical capital stock,and H denotes the efficiency units of production.Which of the following is likely to happen if the physical capital stock and the efficiency units of labor available to the country increase by 10 percent over a span of 5 years,while the state of technology used in the country remains the same?

• A) Output will increase by 5 percent.
• B) Output will increase by 10 percent.
• C) Output will increase by 1 percent.
• D) Output will double.

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Definitions:

Standard Deviation

A method for estimating the dispersion or the degree of spread within a range of values.

Mode

The most common number found in a set of data.

Outliers

Data points that differ significantly from the majority of a data set, often indicating a variance or error in measurement.

Variability

The tendency of data points in a dataset to vary from each other and from the mean of the dataset.