ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -An aggregate production function (PF) relates total output to total employment, assuming all other factors of production and technology are fixed. It shows that increases in employment lead to increases in output but at a decreasing rate.

Detailed explanation-2: -Physical capital consists of inanimate assets such as cash, job site equipment, property, and inventory. Human capital, meanwhile, describes the skills, knowledge, and capabilities associated with a company’s personnel.

Detailed explanation-3: -The aggregate production function describes how total real gross domestic product (real GDP) in an economy depends on available inputs. Aggregate output (real GDP) depends on the following: Physical capital-machines, production facilities, and so forth that are used in production.

Detailed explanation-4: -Macro: The Aggregate production function describes the relationship between all the inputs used in the macroeconomy and the economy’s total output. The marginal product of an input is the change in output associated with one additional unit of a product.