Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please try your best! suppose that the capital intensity of production () is 0.3, the mark-up is 20 percent, the depreciation rate is 6 percent
Please try your best!
suppose that the capital intensity of production () is 0.3, the mark-up is 20 percent, the depreciation rate is 6 percent and the real interest rate is 4 percent, and the desired capital/output ratio is 2.5. Now suppose there is a permanent increase in expected demand of 4%; calculate the increase in the desired capital stock as a percent of output (round your answer to the nearest 1%).
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started