In the relationship expressed in functional form, Y = G(K, L), Y stands for real GDP, K stands for the amount of capital in the economy, and L stands for the amount of labor in the economy. In this case G( ):
A)is the growth rate of real GDP when the amount of capital and labor in the economy is fixed.
B)indicates that the variables inside the parenthesis are endogenous variables in the model.
C)is the symbol that stands for government input into the production process.
D)is the function telling how the variables in the parenthesis determine real GDP.

Question

Quizplus · Accepted Answer

In the relationship expressed in functional form, G( ) is the function telling how the variables in the parenthesis determine real GDP. It is not the growth rate of real GDP when the amount of capital and labor in the economy is fixed, it does not indicate that the variables inside the parenthesis are endogenous variables in the model, and it is not the symbol that stands for government input into the production process.

In the Relationship Expressed in Functional Form, Y = G(K