Does the economy support constant returns to scale

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Question 1: The production of an economy is explained by a function Y = 20 (L.5K.5), where L is labor and K is capital with L = 400 and K = 400. Does this economy support constant returns to scale?

Question 2: "Some economists believe that the large decline in the money supply was the primary cause of the Great Depression of the 1930s." Explain how this can be the case.

Reference no: EM132994980

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