In the equation $Y = F ( K , L ) = \bar { A } \bar { K } ^ { 1 / 3 } L ^ { 2 / 3 }$ , the "bars" over the A and K mean that these variables are:
A) parameters that are endogenous.
B) variables that are fixed but not exogenous
C) parameters that are endogenous
D) variables that are endogenous
E) parameters that are fixed and exogenous

Question

Quizplus · Accepted Answer

The bars over A and K indicate that these are fixed parameters, meaning they do not change within the context of the model. They are exogenous because they are determined outside the model and are not influenced by the other variables within the model.

In the Equation Y=F(K,L)=AˉKˉ1/3L2/3Y = F ( K , L ) = \bar { A } \bar { K } ^ { 1 / 3 } L ^ { 2 / 3 }Y=F(K,L)=AˉKˉ1/3L2/3

In the Equation $Y = F ( K , L ) = \bar { A } \bar { K } ^ { 1 / 3 } L ^ { 2 / 3 }$