-The Above Figure Shows the Market for Capital

question 26

Multiple Choice

-The above figure shows the market for capital. Without a tax on capital income, the interest rate is ________ and firms use ________ million of capital.

• A) 2 per cent; $2,000
• B) 4 per cent; $2,000
• C) 3 per cent; $2,000
• D) 2 per cent; $1,000
• E) 4 per cent; $1,000