macroeconomics discussion

A production function Y = F(A,K,L) shows how much output can be produced with a given amount of capital and labor. The production function can shift to affect overall national productivity. Example: changes in energy supplies or cost as is our present case.

Discussion: based on our present economic situation – “recession” – how will it negatively affect K? what impact would it have on our national production?



by the way Y=F(A,K,L) stands for:

F-"is a function of"

Y-Real GDP

A-Productivity

K- Capital Stock

L- Labor