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QUESTION 1 a) Derive a general formula that relates capital stock and depreciation. b)The following figure shows the demand and supply curve for capital market.

QUESTION 1

a) Derive a general formula that relates capital stock and depreciation.

b)The following figure shows the demand and supply curve for capital market. Find the price of capital, output of capital, depreciation value, net investment value and capital growth at the level of capital market equilibrium.

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