The aggregate production function Y = f(L, H, K) shows that economic growth can occur if:
(i) labor force participation rates fall.
(ii) human capital stays constant.
(iii) education and worker skills improve.
(iv) the depreciation rate increases.

Question

Quizplus · Accepted Answer

The only option that indicates a potential for economic growth in the aggregate production function is when education and worker skills improve (iii). The other options would either decrease productivity (labor force participation rates falling) or not have an impact on growth (human capital staying constant or depreciation rate increasing).

The Aggregate Production Function Y = F(L, H, K) Shows