The relationship between the output produced in an economy, the input of factors of production, and the state of technological knowledge is called the
A)the aggregate supply function
B)aggregate production function
C)aggregate investment function
D)marginal product of labor
E)marginal product of capital

Question

Quizplus · Accepted Answer

The relationship between the output produced in an economy, the input of factors of production, and the state of technological knowledge is captured by the aggregate production function. The aggregate supply function refers to the total amount of goods and services that firms in an economy are willing and able to sell at a given price level, while the aggregate investment function refers to the relationship between the level of investment and other macroeconomic variables. The marginal product of labor and capital refer to the additional output produced by one additional unit of these factors of production, respectively.

The Relationship Between the Output Produced in an Economy, the Input