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Suppose that the economywide expected future marginal product of capital is MPK=20-0.02K where K is the future capital stock. The depreciation rate of capital, d,

Suppose that the economywide expected future marginal product of capital is MPK=20-0.02K where K is the future capital stock. The depreciation rate of capital, d, is 20% per period. The current capital stock K0 is 800 units. The price of a unit of capital is 1. Firms pay taxes equal to 15% of their output. Government purchases are equal to 200, and full-employment output is 1,200. Suppose the real interest rate is 10% per period. What is the (closest) value of the desired capital stock?

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