Suppose production in an economy is represented by a Cobb-Douglas production function.If each worker in the economy becomes more productive,while the number of workers in the economy,the physical capital stock,and the state of technology remain unchanged,________.
A) the GDP of the economy will increase
B) the income per capita in the economy will decrease
C) the inflation rate in the economy will decrease
D) the exchange value of its currency will increase in the foreign exchange market

Question

Quizplus · Accepted Answer

According to the Cobb-Douglas production function, increasing the productivity of each worker will lead to an increase in total output (GDP) of the economy. This is because the production function includes labor as one of its factors of production, and increasing the productivity of labor will increase the output of the economy. The other options are not directly related to the changes described in the scenario.

Suppose Production in an Economy Is Represented by a Cobb-Douglas