Country A has following facts, 1. The capital stock is about 3 times one year’s GDP 2. About 15% of GDP is used to replace depreciating capital. 3. Capital income is about 21% of GDP. 4. The real GDP has a growth rate of 5%. Derive depreciation rate, MPK and (n + g). Evaluating whether country A is saving too much or too little using the golden rule.
Country A has following facts, 1. The capital stock is about 3 times one year’s GDP 2. About 15% of GDP is used to replace depreciating capital. 3. Capital income is about 21% of GDP. 4. The real GDP has a growth rate of 5%. Derive depreciation rate, MPK and (n + g). Evaluating whether country A is saving too much or too little using the golden rule.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Country A has following facts, 1. The capital stock is about 3 times one year’s GDP 2. About 15% of GDP is used to replace
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