Leaving taxes aside, a firm will calculate its rental cost of capital as
A) the nominal interest rate
B) the real interest rate
C) the real interest rate plus the rate of depreciation
D) the real interest rate minus the rate of depreciation
E) the nominal interest rate minus the rate of depreciation
Correct Answer:
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Q1: If the marginal product of capital is
Q2: Which of the following statements is FALSE?
A)investment
Q4: Assume a Cobb-Douglas production function in which
Q5: A firm will keep investing until the
Q6: Which of the following is NOT included
Q7: The rental cost of capital will fall
Q8: Which policy mix serves best to encourage
Q9: Assume the nominal interest rate is i
Q10: The theory of investment contains aspects of
Q11: Assume a Cobb-Douglas production function in which
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