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Suppose the Economy's Production Function Is Y = AK0

Question 95

Multiple Choice

Suppose the economy's production function is Y = AK0.3N0.7.If K = 2000,N = 100,and A = 1,then Y = 246.If A rises by 10 percent,and K and N are unchanged,by how much does Y increase?


A) 5%
B) 10%
C) 15%
D) 20%

Correct Answer:

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