Suppose your company is in equilibrium, with its capital stock at its desired level. A permanent increase in the depreciation rate now has what effect on your desired capital stock?
A. Lowers it, because the user cost of capital is now higher
B. Lowers it, because the future marginal productivity of capital is lower
C. Raises it, because the future marginal productivity of capital is higher
D. Raises it, because the user cost of capital is now lower
Answer: A
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Which of the following would cause a shift in the supply curve to the left?
(a) An increase in consumer income. (b) New technology resulting in the cost of production falling. (c) An increase in the number of suppliers in the industry. (d) None of the above.
Increase in supply mean a new supply (subsidy) line . . .
What will be an ideal response?
Because public goods are characterized by being collectively consumed,
A. they are illegal. B. they are very expensive; thus the private sector cannot provide them. C. the government cannot produce them. D. the private sector may not provide them because they cannot exclude those who do not pay.
The natural rate of interest is a __________ rate that __________ inflationary expectations
A) nominal; includes B) nominal; excludes C) real; includes D) real; excludes