Suppose an economy has the following production function: Y = A ...

[javeds]

Suppose an economy has the following production function: Y = A  K1/4  H3/4. Which of the following is true of this economy?
 
  A) Production in this economy exhibits increasing returns to scale.
  B) Production in this economy exhibits decreasing returns to scale
  C) Production in this economy exhibits constant returns to scale.
  D) Production in this economy decreases when the price level increase.

Question 2

U.S. banks are required by law to keep most of their assets as reserves.
 
  Indicate whether the statement is true or false

[britb2u]

Answer to Question 1

C

Answer to Question 2

FALSE

[javeds]

TYSM

[ultraflyy23]

Excellent