Suppose the Economy's Production Function Is Y = AK⁰

question 88

Multiple Choice

Suppose the economy's production function is Y = AK^0.3N0.7.If K = 2000,N = 100,and A = 1,then Y = 246.If K and N each increase by 5 percent,and A is unchanged,by how much does Y increase?

• A)5%
• B)10%
• C)15%
• D)20%