In the Standard Production Model's Production Function, the Productivity Parameter

question 17

Multiple Choice

In the standard production model's production function, the productivity parameter enters the equation with an exponent of one, while in the Solow model's equation for the steady-state stock of capital it is greater than one because:

• A) the endogenous level of the capital stock itself depends on productivity.
• B) there is no productivity parameter in the production function model.
• C) the productivity measure is zero in the production function model.
• D) the productivity measure is negative in the Solow model.
• E) the exogenous level of the capital stock itself depends on productivity.

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Unobservable Culture

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