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. 15%
B. 5%
C. 20%
D. 10%
Answer: B
Economics
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