The aggregate production function used in the Solow model expresses GDP as a function of:
A) level of technology and total efficiency units of labor only.
B) physical capital and level of technology.
C) physical capital and total efficiency units of labor only.
D) physical capital, level of technology, and total efficiency units of labor.
Question 2
The circular flow diagram implies that if accounting is done correctly, ________.
A) the flow of income must exceed the implied value of the factors of production
B) the implied value of the factors of production must exceed the flow of income
C) the flow of expenditure must equal the income of the households making those expenditures
D) the flow of expenditure must exceed the income of the households making those expenditures
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