Suppose the following production function: Q = 10 (K) 1/3 (L) 2/3 subject to; W *L + r * K = Cost.Suppose that K the amount of capital is K =8.
September 3, 2020
When forming a graph or model it is not necessary to provide perfectly proportioned graphs, just draw it on the paper and take the photo by smart…
September 3, 2020
  1. Suppose there’s a country where the velocity of money is constant.
  2.  Real GDP grows by 6 percent per year, the money stock grows by 10 percent per year, and the nominal interest rate is 7 percent.
  3. A) What is the real interest rate?
  4. B) What is the equation for real interest rate? How can we interpret this equation?
  5. C) What does the real interest rate tell us?
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