7. Suppose that the economywide expected future mar ginal product of capital is = 20 0.02...
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7. Suppose that the economywide expected future mar ginal product of capital is
= −
20 0.02 , ii. Use the investment function derived in part (i)
along with the consumption function and gov ernment purchases, to calculate the real interest rate that clears the goods market. What are the goods market-clearing values of consumption, saving, and investment? What are the tax adjusted user cost of capital and the desired capital stock in this equilibrium?
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Related Book For 
Macroeconomics
ISBN: 9781292446127
11th Edition
Authors: Andrew B. Abel, Ben S. Bernanke, Dean Croushore
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