1) Why does a temporary change in technology result an in increase in Investment in a closed economy ?
2) Net real capital income = (R/P) ● κK - δ(κ) ● κK
Where κ = capital utilization rate
R/P = 12
K = 1
L = 4
δ (κ) = 10κ2
WHAT is the optimal utilization rate of capital?