What Does the Cobb-Douglas Production Function Assume About the Input

question 52

Multiple Choice

What does the Cobb-Douglas production function assume about the input shares in the economy?

• A)the capital share is larger than the labor share of income
• B)both the capital and labor shares of income grow over time
• C)both the capital and labor shares of income remain relatively constant over time
• D)the capital share of income is equal to the labor share of income
• E)none of the above

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Definitions:

Investment Inventory

A list or record of all investments held by an individual or company, including stocks, bonds, and other assets.