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The economy can be described by the following equations. (Note: for this problem express the interest rate in percentage terms. For example, ?% is ?

The economy can be described by the following equations. (Note: for this problem express the interest rate in percentage terms. For example, ?% is ? = ? and not ? = ?. ??) C. labeled figure, explanation

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\fc. If the amount of capital falls to K = 512, how does the real interest rate change? Explain the intuition behind your answer using a few sentences and a well-labeled figure. (10 pts)

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