Homework Answers
Answer 3
a)
Y = F(K,L) = 100 + 3K + 9L
where Y = rea GDP, K = quantity of Capita and L = quantity of Labor. It is given that K = 200 and L = 500
So, Y = 100 + 3K + 9L = 100 + 3*200 + 9*500 = 5200
Hence, Real GDP = 5200
b)
Endogenous variables are the Variables which are determined within the model and not considered as Given. In this question only Real GDP(Y) is not considered as given determined in the model and hence Endogenous variable is Real GDP
c)
Exogenous variables are the Variables which are considered as Given and are constant and are independent of any variable in the model. In this question Both K(capital) and Labor(L) are independent and considered as given and hence Exogenous variables are K(Capital) and L(Labor)
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