Problem
1. Explain the two characteristics of the CobbDouglas production function that make it particularly useful to macroeconomists.
2. What are supply shocks and from what sources can they arise? Distinguish between positive and negative supply shocks.
3. What are factor prices? What classical assumptions are used in explaining how they are determined?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.