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Determining the population growth rate

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Consider the production function: Y = A · (K^0.8)*(N^0.2) with A = 5, K = 400, N = 3000

A unit of output sells for $100? The nominal interest rate is 5%, the expected inflation rate is 3%, the depreciation rate is 13%, and the population growth rate is 2%. If a unit of capital costs $5,000, is the capital market in equilibrium. If not, is there too much or too little capital?

Reference no: EM132405872

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