Scenario: Assume the Following Aggregate Production Functions for Two Countries

question 43

Multiple Choice

Scenario: Assume the following aggregate production functions for two countries, A and B, respectively.
YA=A KA¹/² ᴴA¹/²
ʸB=A KB²/³ ᴴB¹/³
-Refer to the scenario above.Country B's aggregate production function is consistent with the fact that ________.

• A) empirically roughly one third of national income goes to labor and two thirds of national income go to capital
• B) increasing capital and labor by 10 percent each would increase output by 10 percent
• C) increasing capital and labor by 10 percent each would increase output by 20 percent
• D) empirically returns to capital are typically greater

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Definitions:

Sensory Experiences

Interactions with the environment through the senses, including sight, sound, touch, taste, and smell, which can influence emotional and cognitive development.

Standard Deviation

A statistical measurement that shows how much variation or dispersion exists from the average (mean) value.

Frequency Polygon

A graphical representation of the distribution of numerical data. It is usually a line that connects points representing the frequencies of various categories or intervals of data.

Class Intervals

Ranges of values into which data points are grouped for frequency distribution analysis.