What is the capital accumulation equation used by Solow?
What will be an ideal response?
According to Solow, the capital in the current year is equal to the capital of last year less the depreciated capital plus the level of investment. This implies:
Kcurrent year = Klast year - Kdepreciated + I
or, Kcurrent year = Klast year - (depreciation rate × Klast year) + I
or, Kcurrent year = (1 - depreciation rate) × Klast year + I
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Assume that the market for corn is perfectly competitive. Currently, firms growing corn are generating losses. In the long run, we can expect
A. new firms to enter, causing the market price of corn to decrease. B. some firms to exit, causing the market price of corn to increase. C. some firms to exit, causing the market price of corn to decrease. D. new firms to enter, causing the market price of corn to increase.
Why do most exchanges in the United States occur by using money?
What will be an ideal response?
When very few substitutes for a good exist, demand will be
A. inelastic. B. elastic. C. perfectly elastic. D. unit-elastic.
Economics is the study of
A. how to invest in the stock market. B. the role of money in markets. C. how government officials decide which goods and services are produced. D. how society uses limited resources.