MACROECONOMICS
10th Edition
ISBN: 9781319106072
Author: Mankiw
Publisher: MAC HIGHER
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Question
Chapter 19, Problem 7PA
(a)
To determine
The changes in the rental
(b)
To determine
The changes in rental price of capital, cost of capital, and investment.
(c)
To determine
The changes in rental price of capital, cost of capital, and investment.
(d)
To determine
The changes in the rental price of capital, cost of capital, and investment.
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Suppose that an economy’s production function is Cobb–Douglas with parameter = 0.3
a. What fractions of income do capital and labor receive?
b. Suppose that immigration increases the labor force by 10 percent. What happens to total output (in percent)? The rental price of capital? The real wage?
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d. An increase in taxation.
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