What Determines The Total Production Of Goods And Services In The Economy? The two most important factors of production are capital and labour. … Capital (K) is the set of tools that workers use, while labour (L) is the time people spend working. What determines production in an economy? The factors of production are the
What Increases Marginal Product Of Capital? Marginal product of capital (MPK) is the incremental increase in total production that results from one unit increase in capital while keeping all other inputs constant. … α represents the proportion of capital and 1- α represents the proportion of labor required for production to occur. What increases marginal
What Is GDP GNP And NNP? Gross national product (GNP): The market value of all the final. goods and services produced anywhere in the world in a given time period by the factors of production supplied by the residents of the country. GNP = GDP + net factor income from abroad. 13. Net national product