The aggregate production function Y = f(L, H, K) shows that economic growth can occur if:
(i) human capital increases.
(ii) labor productivity falls.
(iii) the capital stock in the country depreciates.
(iv) the depreciation rate increases.

Question

Quizplus · Accepted Answer

Economic growth can occur if human capital increases, as it directly contributes to the productivity of labor. Increases in labor productivity, capital stock, and decreases in depreciation rates are factors that contribute to growth, not the options listed as (ii), (iii), and (iv).

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