Question

An increase in the stock of capital makes the aggregate productionfunction:a. steeper.b. flatter.c. shift up.d. shift down.e. stay the same.

Answer 1

The correct answer is option c.

Step-by-step explanation:

The aggregate production function shows the relationship between the total economic output and the amount of inputs used.

Keeping other things constant, an increase in the stock of capital will cause the the production function to move upwards. This shows that the economy will be able to produce more output.