An increase in which of the following variables will cause an increase in the user cost of capital?

Question

Quizplus · Accepted Answer

The user cost of capital is given by (r+δ-p) where r is the interest rate, δ is the depreciation rate, and p is the expected capital appreciation rate. An increase in δ will increase the user cost of capital. Changes in Πt and Πet (profits and expected profits) do not directly affect the user cost of capital.

An Increase in Which of the Following Variables Will Cause