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Consider an economy with the production function , a depreciation rate of 5%, a saving and investing rate of 10%, and no labor growth.
-Each year in this economy,

Question

The next questions refer to the following.
Consider an economy with the production function  , a depreciation rate of 5%, a saving and investing rate of 10%, and no labor growth.
-Each year in this economy,

Quizplus · Accepted Answer

In this economy, the output is 20,000 and consumption is 18,000, which implies that the economy is producing more than it is consuming, allowing for savings or investment.

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