The arbitrage condition for capital demonstrates that:
A) returns to a bank account are equal to the return to capital.
B) returns to a bank account are equal to the user cost of capital.
C) if taxes are zero,profits are maximized.
D) profit maximizing will yield the optimal amount of capital a firm should buy.
E) the user cost is less than the marginal product of capital.
Correct Answer:
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Q4: For the profit-maximizing firm, if the real
Q5: If the real interest rate is 4
Q7: In the equation Q10: The important tool introduced in Chapter 16 Q12: In the arbitrage equation a profit maximizing Q13: We can use the arbitrage equation: Q13: When capital depreciation is included in the Q14: If the real interest rate is 4 Q20: The user cost of capital is: Q28: If capital gain rises, a firm should:![]()
A) to
A) the
A)
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