Country A's real GDP per capita is given by &y=8k and has a capital per capita.k = 22,500. Suppose the country devotes30% of its real GDP per capita to making investment goods.(a) How much is the country's investment per capita?(b) In addition, if 1.5% of the capital depreciates every year, is Country A's real GDP per capita increasing, decreasing, or remaining unchanged?

Country A's real GDP per capita is given by &y=8k and has a capital per capita.k = 22,500. Suppose the country devotes30% of its real GDP per capita to making investment goods.(a) How much is the country's investment per capita?(b) In addition, if 1.5% of the capital depreciates every year, is Country A's real GDP per capita increasing, decreasing, or remaining unchanged?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter20: Economic Growth

Section: Chapter Questions

Problem 33P: An economy starts off with a GDP per capital of 12,000 euros. How large will the GDP per capita be...

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Question

Country A's real GDP per capita is given by &y=8k and has a capital per capita.k= 22,500. Suppose the country
devotes30% of its real GDP per capita to making investment goods.(a) How much is the country's investment per
capita? (b) In addition, if 1.5% of the capital depreciates every year, is Country A's real GDP per capita increasing,
decreasing, or remaining unchanged?

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Step 2: Calculate the Real GDP Per Capita

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Step 3: Determine the Investment Per Capita

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Step 4: Calculate the Depreciation of Capital

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