Suppose That a Machine Costs $10,000 in Constant Dollars and the Real

question 43

Multiple Choice

Suppose that a machine costs $10,000 in constant dollars and the real rate of interest is 12 percent.If the machine is expected to increase in price by 2 percent and the rate of depreciation is 5 percent,then the user cost of capital for that machine over one year is equal to ________.

• A)$150
• B)$1,500
• C)$10,000
• D)$102,500

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Definitions:

Formal Operational

A stage in Piaget's theory of cognitive development where individuals can think abstractly and systematically solve problems.

Initiative Vs. Guilt

The third stage of Erik Erikson's theory of psychosocial development, where children face the challenge of taking initiative in activities versus feeling guilty for their actions and thoughts.

Industry Vs. Inferiority

A stage in Erik Erikson's theory of psychosocial development where children develop a sense of competence and belief in their skills or feel inferior and doubt their abilities.

Autonomy Vs. Shame

A stage in Erik Erikson's theory of psychosocial development where toddlers develop a sense of personal control over physical skills and a sense of independence, or otherwise experience shame and doubt about their abilities.