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Posted: December 31st, 2020
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Question description
Instructions write at least 600 words to explain.Use of graphs to explain the concepts is compulsory.Please provide a proper explanation. thank you.Over the past 100 years or so, the development experience of many countriesis described by two facts: (1) The economy’s capital/labor ratio rises, and (2) The shareof labor and capital in national income are roughly constant. How can this be? What dothese two empirical facts suggest about the form of the production function? (Hints: (1) Theshare of labor is w · L/Y and the share of capital is R · K/Y , (2) Assume factor markets arecompetitive, so factors are paid their marginal products).
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