According to the Neoclassical Model of Investment, the Immediate Impact

question 71

Multiple Choice

According to the neoclassical model of investment, the immediate impact of an earthquake that destroys part of the capital stock will be to:

• A) increase the cost of capital, the rental price of capital, and the rate of investment.
• B) increase the rental price of capital and the rate of investment, but to leave the cost of capital unchanged.
• C) increase the rental price of capital and the cost of capital, but to leave the rate of investment unchanged.
• D) increase the rental price of capital and the rate of investment, but to decrease the cost of capital.

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Definitions:

Rationalize Denominator

The process of eliminating a radical from the denominator of a fraction by multiplying both the numerator and the denominator by an appropriate quantity.

Rationalize Denominator

The process of eliminating a root from the denominator of a fraction.

Radical Expression

A radical expression is an expression that includes a root symbol, indicating the root of a number or an expression needs to be taken.

Radical Expression

An expression that includes a radical symbol, indicating the root of a number or another expression.