The user cost of capital is given by the following formula,where p_K is the real price of capital goods,d is the depreciation rate,and r is the expected real interest rate. A)uc = (r + d)/p_K B)uc = p_K/(r + d) C)uc = dp_K/r D)uc = (r + d)p_K

Question

Quizplus · Accepted Answer

The user cost of capital formula incorporates both the depreciation rate and the expected real interest rate, multiplied by the real price of capital goods, which aligns with option D.

The User Cost of Capital Is Given by the Following