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Suppose that GDP production function of the United States has the form Y = KL1 where K is capital, L is labor and Y is GDP. The parameter has a value of 0.7. Suppose that immigration to the US increases the labor force (L) by 5% percent. What happens to the rhe rental price of capital? Express in percentage changes compared to the situation before immigration takes place. a. Goes up by about 1.47% b. Goes down by 2% c. Goes up by 2% d. None of the above.

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Suppose that GDP production function of the United States has the form Y = KL1 where K is capital, L is labor and Y is GDP. The parameter has a value of 0.7. Suppose that immigration to the US increases the labor force (L) by 5% percent. What happens to the rhe rental price of capital? Express in percentage changes compared to the situation before immigration takes place. a. Goes up by about 1.47% b. Goes down by 2% c. Goes up by 2% d. None of the above

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  • 1. Suppose that GDP production function of the United States has the form Y = KL1 where K is capital, L is labor and Y is GDP. The parameter has a value of 0.7. Suppose that immigration to the US increases the labor force (L) by 5% percent. What happens to the rhe rental price of capital? Express in percentage changes compared to the situation before immigration takes place. a. Goes up by about 1.47% b. Goes down by 2% c. Goes up by 2% d. None of the above