In the aggregate production function,Y represents real GDP,K represents the capital stock,L represents the quantity of labour,and A represents an index of efficiency.Which of the following equations represents the aggregate production function?

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The equation Y = AF(K, L) is the standard form of the aggregate production function, where Y represents real GDP, K represents the capital stock, L represents the quantity of labour, and A represents an index of efficiency. This equation states that real GDP is a function of the efficiency of combining inputs of capital and labour, represented by A, as well as the quantity of these inputs, represented by K and L. Option A) is incorrect because it ignores the effect of the efficiency index A on real GDP. Option B) is incorrect because it implies that real GDP and A are directly proportional, which is not necessarily the case. Option D) is incorrect because it equates real GDP to both (K x L) and A/FY, which is not a valid expression.

In the Aggregate Production Function,Y Represents Real GDP,K Represents the Capital