In the relationship expressed in functional form, Y = G(K, L), Y stands for real GDP, K stands for the amount of capital in the economy, and L stands for the amount of labor in the economy. In this case G( ):
A) is the growth rate of real GDP when the amount of capital and labor in the economy is fixed.
B) indicates that the variables inside the parentheses are endogenous variables in the model.
C) is the symbol that stands for government input into the production process.
D) is the function telling how the variables in the parentheses determine real GDP.

Question

Quizplus · Accepted Answer

G( ) is the function telling how the variables K and L in the parentheses determine real GDP Y.

In the Relationship Expressed in Functional Form, Y = G(K