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A Small Country Has an Aggregate Production Function Per Hour

Question 37

Multiple Choice

A small country has an aggregate production function per hour of labor given by Y = K1/2. Its depreciation rate is 1 percent and its investment rate is 10 percent. What is its steady-state level of capital?


A) 10
B) 100
C) 1
D) You need to know the steady-state level of RGDP to answer this question.

Correct Answer:

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