What is the distinction between the price of capital equipment and the rental rate of capital?
What will be an ideal response?
The price of a unit of capital is how much must be paid to acquire the piece of capital equipment. The rental rate of capital is the amount that must be paid to use the unit of capital equipment. For instance, the copy machine at the local Quik Print has a price of $10,000 but its services can be rented from the Quik Print for $50 per hour.
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Advances in medical practice have increased both expected lifespans and medical expenditures. What does the life-cycle hypothesis predict as the macroeconomic consequences?
What will be an ideal response?
If the demand for money decreases, but the Fed keeps the money supply the same:
a. nominal interest rates will rise and aggregate demand will fall. b. nominal interest rates will rise and aggregate demand will rise. c. nominal interest rates will fall and aggregate demand will fall. d. nominal interest rates will fall and aggregate demand will rise.