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
|