Assume output per person is produced according to the production function y=Akθwhere θ=1/3. Further assume the...
Assume output per person is produced according to the production function y=Akθwhere θ=1/3. Further assume the home country has kh=1 and Ah=1, while the foreign country has kf=2 and Af=3.
Assuming capital flows freely, what best describes the capital flows economists would expect to see between these two countries?
a. No capital movement
b. Capital flows from Home to Foreign
c. Capital flows from Foreign to Home
d. Not enough information
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Assume output per person is produced according to the production
function y=Akθwhere θ=1/3.
Further assume the...
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