Author Question: Once the marginal product of capital is equal to the real rental cost of capital ________. A) ... (Read 77 times)

Medesa · **on:** Jun 30, 2018

Once the marginal product of capital is equal to the real rental cost of capital ________.

A) inventories will stabilize
B) depreciation will equal the marginal rate of substitution
C) the economy will reach full employment
D) a profit-seeking firm will stop acquiring capital

Question 2

Given the aggregate production function Y = A , the Solow residual equals ________ when Y is 60, K = 5 and L = 5.

A) 2.4
B) 35
C) 25
D) 12