Suppose that a machine costs $10,000 in constant dollars and the real rate of interest is 12 percent
If the machine is expected to increase in price by 2 percent and the rate of depreciation is 5 percent, then the user cost of capital for that machine over one year is equal to ________. A) $150
B) $1,500
C) $10,000
D) $102,500
B
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In 2008, Japan's government approved a $1 trillion fiscal stimulus plan comprised of both tax cuts and government expenditure increases. As a result
A) Japan's aggregate demand curve shifted rightward. B) Japan's aggregate supply curve shifted leftward. C) Japan's aggregate demand curve shifted leftward. D) Japan's long-run aggregate supply curve shifted leftward.
Explain how each of the following events would affect the aggregate demand curve
a. Lower interest rates b. A decrease in net exports c. A decrease in the price level d. Slower income growth in other countries e. A decrease in imports What will be an ideal response?