If the Slope of the Per-Worker Production Function Is 1/2

question 147

Multiple Choice

If the slope of the per-worker production function is 1/2 in a given range,how will a $10,000 increase in capital per hour worked affect real GDP per hour worked in the same given range?

• A)Real GDP per hour worked will increase by $5,000.
• B)Real GDP per hour worked will increase by $20,000.
• C)Real GDP per hour worked will increase by $10,000.
• D)Real GDP per hour worked will decrease by $20,000.

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Definitions:

Present Value

The value today of a future amount of money or sequence of cash inflows, accounting for a defined rate of return.

Interest Rate

The percentage of a sum of money charged for its use, serving as the cost of borrowing or the reward for saving.

Time Preference

The degree to which individuals prioritize current goods and services over future ones.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return, used in finance and investment analysis.