Firms will borrow to finance capital expansion until the MRP of the investment equals the
a. MRP of labor.
b. marginal cost of the finished good.
c. marginal physical product of capital.
d. interest payment charged for borrowing.
d
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The main goals of monetary policy include all of the following EXCEPT
A) attaining the maximum sustainable growth of potential GDP. B) keeping the unemployment rate close to the natural unemployment rate. C) keeping the long term nominal interest rate equal to the real interest rate plus the inflation rate. D) keeping the inflation rate low. E) keeping the long-term interest rate at a moderate level.
If an indifference curve is bowed in toward the origin, the marginal rate of substitution is
a. not likely to reflect the relative value of goods. b. likely to be constant for all bundles along the indifference curve. c. likely to be identical to the price ratio for each bundle along the indifference curve. d. different for each bundle along the indifference curve.