Imagine an economy with production function Y = F(K)= and 400 units of capital.If the depreciation rate is $\delta$= .05,how much capital will deteriorate in the next period?

Question

Quizplus · Accepted Answer

The depreciation of capital is calculated as the depreciation rate (0.05 or 5%) multiplied by the total amount of capital (400 units). Therefore, 0.05 * 400 = 20 units of capital will deteriorate in the next period.

Imagine an Economy with Production Function Y = F(K)= and 400