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In the Long Run, If the Marginal Product of Capital It=aˉiI _ { t } = \bar { a } _ { i }

Question 82

Multiple Choice

In the long run, if the marginal product of capital equals the real interest rate, investment is given by:


A) It=aˉiI _ { t } = \bar { a } _ { i }
B) It=aˉiYtI _ { t } = \bar { a } _ { i } Y _ { t }
C) It=aˉiYˉtI _ { t } = \bar { a } _ { i } \bar { Y } _ { t }
D) lt=Y~t/aˉil _ { t } = \tilde { Y } _ { t } / \bar { a } _ { i }
E) It=[aˉibˉ(Rtrˉ) ]Y~tI _ { t } = \left[ \bar { a } _ { i } - \bar { b } \left( R _ { t } - \bar { r } \right) \right] \tilde { Y } _ { t }

Correct Answer:

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