Suppose That the Production Function for the Economy Is Y

question 56

Multiple Choice

Suppose that the production function for the economy is Y = AK⁰.²ᴸ⁰.⁸.If the capital stock = 40 000,the quantity of labour = 10 000,and the efficiency index = 1,real GDP is

• A) $13 195.08.
• B) $16 000.00.
• C) $16 946.34.
• D) $28 000.00.

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Definitions:

Government Bond

A type of investment where an investor loans money to a government in exchange for periodic interest payments plus the return of the bond's face value at maturity.

Treasury Bill

A Treasury Bill (T-Bill) is a short-term U.S. government debt obligation backed by the Treasury Department with a maturity of one year or less.

Inflation Rate

The inflation rate measures how much the general level of prices for goods and services is rising, and, subsequently, how purchasing power is eroding over time.