The Next Questions Refer to the Following

Multiple Choice

The next questions refer to the following.
Suppose the economy has the production function Y = .8K, gross investment is 10% of national income, and the rate of depreciation is 5% of the capital stock.
-The capital stock of this economy

A) is constant
B) will grow by 2% per year
C) will grow by 3% per year
D) will grow by 5% per year
E) will grow by 6% per year