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Level of capital stock per labor hour

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Consider the economy of a small country. For each labor hour, it has capital stock equal to 900 units. In the current year it produced 20 units of new capital goods, with a depreciation rate of 20% and a production function of Y= K1/2. What will the level of capital stock per labor hour be next year for this small country?

  • 920 units
  • 720 units
  • 900 units
  • 740 units

Reference no: EM131224646

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