Suppose the Harrod-Domer model is valid and the country of Xanadu produces 1.2 million dollars’ worth...

Suppose the Harrod-Domer model is valid and the country of Xanadu produces 1.2 million dollars’ worth of consumer goods and $300,000 worth of capital goods in 2019. Its total capital stock is worth 6 million dollars and 2% of this depreciates each year. What is the capital stock in 2020?

5.05 million

6.18 million

6.3 million

5.88 million

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Expert Solution

Rahul Sunny answered 1 year ago

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