On January 1, 2026 each of Boblandia's 100 workers has $1 in physical capital. Over the course of the year, its physical capital depreciates by 5%, and the number of workers increases by 5%. How much does Boblandia have to invest in 2026 to make sure that its capital to labour ratio is the same on January 1, 2027 as it was on January 1, 2026

Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter27: Investment, The Capital Market, And The Wealth Of Nations
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1 ) On January 1, 2026 each of Boblandia's 100 workers has $1 in physical capital. Over the course of the year, its physical capital depreciates by 5%, and the number of workers increases by 5%. How much does Boblandia have to invest in 2026 to make sure that its capital to labour ratio is the same on January 1, 2027 as it was on January 1, 2026

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