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

question 59

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,what is the steady-state amount of capital?

• A) 16 units
• B) 64 units
• C) 100 units
• D) 225 units

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