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Consider the following real intertemporal model with investment. - The representative oonsumer faces labour-leisure choice problem in each of the two periods. Also she chooses

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Consider the following real intertemporal model with investment. - The representative oonsumer faces labour-leisure choice problem in each of the two periods. Also she chooses how much to save. - The representative rm faces prot maximization questions in each of the two periods. Also it chooses how much to invest. At the end of the second period, the rm liquidates all of its remaining capital and includes it in prot. - Production function: Y = zF(K,N), Y'= z'(K'N') - Suppose K is owned by the rm. So the only cost of production is the labour cost. - Evolution of capital stock is given by: K' = (1 - d)K + l, where d is the deprecation rate, and l is the investment. Suppose K = 10, d = 0.1, l = 11. What is the amount of capital at the end of the second period? 0 A. 21 O B. 19 0 c. 20 (9 D. 18 O E. None of the above

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