Suppose your company is in equilibrium, with its capital stock at its desired level. A permanent decline in the expected real interest rate now has what effect on your desired capital stock?
A. Raises it, because the future marginal productivity of capital is higher
B. Raises it, because the user cost of capital is now lower
C. Lowers it, because the user cost of capital is now higher
D. Lowers it, because the future marginal productivity of capital is lower
Answer: B
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Suppose Ferd truthfully tells the car dealer the maximum amount he's willing to pay for a Ford Mustang: $20,000 . The dealer says, "You're in luck; we have one on the lot for $20,000." Which of the following statements is true?
a. Ferd will not buy the car. b. The car is not worth $20,000. c. Ferd gets $20,000 in consumer surplus. d. Ferd gets no consumer surplus. e. The dealer earns $20,000 in consumer surplus.
Utility is defined as the:
a. sense of pleasure or satisfaction derived from consuming goods and services. b. cost of acquiring goods and services. c. profits consumers earn from consuming goods and services. d. monetary value to consumers of goods and services. e. desire to consume goods and services.
Economics can be viewed as a way to think about problems
Indicate whether the statement is true or false
____ experience lower rates of unemployment than do ____
a. Teenagers; adults b. Adult males; adult females c. Skilled workers; unskilled workers d. Black females; white females