The nominal interest rate is equal to i=0,04, and the rate of depreciation of capital is d=0,09. The price of capital equipment is equal to the overall price level. Both price levels are expected to grow at the rate equal to n=0,01. The production function is given by Y = (AKL)0.76 , where A is technology, L is labor and K is capital stock. The level of output is equal to 1600. Assume that the capital stock is always at the desired level. (Please fill in numbers; use a comma as a decimal separator: 10,5) 1. The real value of the user cost of capital is equal to 2. If an increase in productivity of capital increases output by 160, the desired capital stock increases by 3. Suppose that Y=1600, i=0,04, d=D0,09, n=0,01 when the government imposed a tax on the profits of corporations at the rate of 0,25. The change in the desired capital stock is

The nominal interest rate is equal to i=0,04, and the rate of depreciation of capital is d=0,09. The price of capital equipment is equal to the overall price level. Both price levels are expected to grow at the rate equal to n=0,01. The production function is given by Y = (AKL)0.76 , where A is technology, L is labor and K is capital stock. The level of output is equal to 1600. Assume that the capital stock is always at the desired level. (Please fill in numbers; use a comma as a decimal separator: 10,5) 1. The real value of the user cost of capital is equal to 2. If an increase in productivity of capital increases output by 160, the desired capital stock increases by 3. Suppose that Y=1600, i=0,04, d=D0,09, n=0,01 when the government imposed a tax on the profits of corporations at the rate of 0,25. The change in the desired capital stock is

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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