What will the capital stock be in the long run

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Imagine that this country is in its steady state so its capital stock is k* . Imagine that the country receives a gift of one unit of capital from the World Bank (so, suddenly, the capital stock is k*+1). Can you say what is going to happen to the growth rate immediately after the donation? Why? What will the capital stock be in the long run? Explain.

Reference no: EM131246842

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