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Business, 18.09.2019 03:20 jessica01479

Let’s think about two countries, frugal and smart. in frugal, people devote 50% of gdp to making new investment goods, so =0.5, and their production function is =k‾‾√. in smart, people devote 25% of gdp to making new investment goods, so =0.25 and their production function is =2k‾‾√. both countries start off with k=100.a. what is the amount of investment in each country this year? investment, frugal: investment, smart: b. what is the amount of consumption (gdp−investment, or − ) in each country this year? consumption, frugal=consumption, smart=c. where would you rather be a citizen: frugal or smart? a)frugalb)there is no appreciable difference between the two countries. c)smart

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