The Hotelling Principle is the idea that the price of a ________ is expected to rise at a rate equal to the ________.

Question

Quizplus · Accepted Answer

The Hotelling Principle specifically pertains to the price of nonrenewable natural resources, which are expected to rise at a rate equal to the interest rate. This is because as the resource becomes more scarce, it becomes more valuable, leading to an increase in price. However, the other answer choices refer to different economic concepts and are not related to the Hotelling Principle.

The Hotelling Principle Is the Idea That the Price of a ________