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Imagine an Economy with Production Function Y = F(K)= and 400

Question 54

Multiple Choice

Imagine an economy with production function Y = F(K) = and 400 units of capital.If the fraction of output invested in new capital is = 0.2 and the depreciation rate is = .05,how much total capital will be available in the next period?


A) 380 units
B) 384 units
C) 400 units
D) 404 units

Correct Answer:

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