Essay
In this chapter we derived: P × MPK = rental cost of capital or r
a. From the cash-flow valuation approach, assume that cash flows are growing at a rate of g. Derive the above equilibrium condition in this case.
b. Based on your answer in (a), explain in a neoclassical sense why China's investment rates are so high compared to the United States.
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a. In this case NPV = - ΔK + CF(K)/(r-g)...View Answer
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Q1: In this chapter we discussed the user
Q2: When investment is a large fraction of
Q3: Discuss the neoclassical framework as it relates
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Q7: Go to FRED (the Federal Reserve Economic
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