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When Capital Depreciation Is Included in the Arbitrage Equation for Capital

Question 9

Multiple Choice

When capital depreciation is included in the arbitrage equation for capital, the user cost of capital is given by:


A) MPK+R+dˉM P K + R + \bar { d }
B) Rdˉ÷MPKR \cdot \bar { d } \div M P K
C) R+dˉ(Δpk/pk) R + \bar { d } - \left( \Delta p _ { k } / p _ { k } \right)
D) R+dˉMPKR + \bar { d } - M P K
E) dˉ+Δps\bar { d } + \Delta p _ { s }

Correct Answer:

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