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Suppose the tax-adjusted user cost of capital is equal to 2, while the expected marginal product of capital (MPK') is given by 12 - 0.1K,
Suppose the tax-adjusted user cost of capital is equal to 2, while the expected marginal product of capital (MPK') is given by 12 - 0.1K, where K represents the capital stock. Suppose current capital stock is 90 and the depreciation rate is 10% each period. What is the desired investment
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