Calculate the user cost of capital of a machine that costs $5000 and depreciates at a rate of 25%, when the expected real interest rate is 5%.

A relatively steep money demand schedule reflects the assumption that the interest elasticity of money demand is

a. low (in absolute value). b. high (in absolute value). c. zero. d. indefinite.

A tariff is a tax on either imports or exports

a. True b. False