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MACRO ECONOMICS - PLEASE OUTLINE CORRECT MULTIPLE CHOICE ANSWER Bob lives on an island and has 20 apple trees in the current period. Which currentlyr

MACRO ECONOMICS - PLEASE OUTLINE CORRECT MULTIPLE CHOICE ANSWER

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Bob lives on an island and has 20 apple trees in the current period. Which currentlyr produces 130 apples. Bob sells apples to neighboring islands to make living. Bob can borrow and lend apples with neighboring island. In the apple credit market, e loan of 1 apple mustbe repaid with 2 apples in the future period. In each period, Bob's apple trees produce apples and then 10% of them die. If Bob plants an apple in the current period, itwill grow into a productive apple tree in the future period. At the end of the future period, Bob can sell anyr remaining apple tree for1 apple each. The diminishing marginal product applies. The output in the future period, for given number of trees in production in the future period is given in the table. What is Bob's optimal quantityof investment? 0&2 05.4 00.1 one OE.1 Future Trees 15 16 17 18 1Q 20 21 22 23 24 25 Future Output 155.0 162.0 168.0 1 3'10 1 ??.0 180.0 182.0 183.8 184.8 185.2 185.4

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