What is depreciation, and what happens to the depreciation line when the rate of depreciation increases or decreases?
What will be an ideal response?
Depreciation refers to the reduction in the capital stock that occurs either because machinery, equipment, and other capital goods become worn out by use or because they become obsolete. When depreciation increases, the depreciation line becomes steeper, and when depreciation decreases, the depreciation line becomes flatter.
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The labor force participation rate
A) increases as the real wage increases. B) decreases as the real wage increases. C) has nothing to do with the real wage rate. D) increases as the opportunity cost of working increases. E) is one of the major reasons that firms pay efficiency wages.
In the one-period valuation model, the current stock price increases if
A) the expected sales price increases. B) the expected sales price falls. C) the required return increases. D) dividends are cut.
Refer to the above figure. If demand curve D1 is the relevant demand curve, rent is
A) zero. B) OG. C) area FHGO. D) area KHG.
In a perfectly competitive labor market, the industry demand curve is ________ and the industry supply curve is ________
A) perfectly elastic; upward sloping B) downward sloping; upward sloping C) upward sloping; downward sloping D) vertical; perfectly elastic