If the Production Function Is Y = AK^2/3L^1/3 in the Land

question 59

Multiple Choice

If the production function is Y = AK^2/3L^1/3 in the land of Solovia,and the labour force increases by 5 percent while capital is constant,labour productivity will:

• A) increase by 3.33 percent.
• B) increase by 1.67 percent.
• C) decrease by 1.67 percent.
• D) decrease by 3.33 percent.

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Definitions:

Rate of Return

The upward or downward movement in an investment's value, measured across a specific interval, and expressed relative to the investment's initial value.

Cumulative Gain

The total amount of gain or profit accumulated over a specific period of time.

Rate of Return

The percentage of profit or loss on an investment over a specified period.

Capital Gain Yield

The rise in the price of a security, like a stock or bond, leading to a profit if sold; expressed as a percentage increase over the investment's cost.