Suppose That the Production Function for the Economy Is: Y

Multiple Choice

Suppose that the production function for the economy is: Y = AK¹/⁴ᴸ³/⁴.Assume that real GDP is $8000 billion,capital stock is $32 000 billion,and the labour supply is 120 million (or 0.120 billion) workers.An increase in the capital stock of $1 billion will increase real GDP by

A) $0.03125 billion.
B) $0.0625 billion.
C) $0.25 billion.
D) $1 billion.