Suppose the economy's production function is Y = AK0.3N0.7. If K = 2000, N = 100, and A = 1, then Y = 246. If K and N each increase by 5 percent, and A is unchanged, by how much does Y increase?
A) 5%
B) 10%
C) 15%
D) 20%
A
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a. True b. False Indicate whether the statement is true or false
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A) model. B) prediction. C) conclusion. D) assumption.
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