The following figure shows two aggregate production functions.

-Refer to the figure above.Assume the economy is at point B of the aggregate production function 2 in 2010.It will move toward point A in 2012 if the ________.
A) quantity of physical capital increases and technology remains constant
B) quantity of physical capital increases and technology increases
C) number of workers increases and technology remains constant
D) total efficiency units of labor increase and technology increases

Question

The following figure shows two aggregate production functions.
 
-Refer to the figure above.Assume the economy is at point B of the aggregate production function 2 in 2010.It will move toward point A in 2012 if the ________.
A) quantity of physical capital increases and technology remains constant 
B) quantity of physical capital increases and technology increases 
C) number of workers increases and technology remains constant 
D) total efficiency units of labor increase and technology increases

Quizplus · Accepted Answer

The quantity of physical capital increases and technology remains constant.

The Following Figure Shows Two Aggregate Production Functions