In a perfectly competitive market a firm's rental rate for a machine (v) will be given by: v = P(r + d) where r is the prevailing rate of interest and d is the depreciation rate. In this formula P represents
a. the present market price of the machine
b. the initial purchase price of the machine (assuming this differs from its present market price.
c. the price of the firm's product.
d. the depreciated value of the machine.
a
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Which of the following macroeconomic variables is most dependent on whether the government pursues an active approach to policy or a passive approach to policy?
a. Aggregate supply b. Aggregate demand c. Money demand d. Money supply e. Interest rate
If a country allows trade and, for a certain good, the domestic price without trade is lower than the world price,
a. the country will be an exporter of the good. b. the country will be an importer of the good. c. the country will be neither an exporter nor an importer of the good. d. Additional information is needed about demand to determine whether the country will be an exporter of the good, an importer of the good, or neither.