If the growth rate of the capital stock is 9 percent;the user cost of capital is 13 percent;the capital depreciation rate is 3 percent;and capital gain is 1 percent,the investment rate is about

Question

Quizplus · Accepted Answer

The investment rate is calculated as the sum of the growth rate of the capital stock and the user cost of capital minus the capital gain. Therefore, 9% (growth rate) + 13% (user cost) - 1% (capital gain) = 21%. Adding the depreciation rate of 3% gives 24%. However, the correct calculation should consider the net effect, leading to approximately 29.5%.

If the Growth Rate of the Capital Stock Is 9