Which of the Following Three Statements Is True: I) the Amount

question 22

Multiple Choice

Which of the following three statements is true: I) The amount of capital equipment a firm wishes to buy depends on the rate of interest; II) The amount of capital equipment a firm wishes to buy depends on the purchase price of capital; III) The amount of capital equipment a firm wishes to buy depends on the rates of technological and physical depreciation.

• A)I
• B)II
• C)I and II
• D)All three statements are true.

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Definitions:

Price Level

The general cost of goods and services in an economy at a given time.

Net Exports

The value of a country's total exports minus the value of its total imports; it is a component of a country's gross domestic product (GDP).

Real Values

Economic measures that have been adjusted for inflation, allowing for comparisons over time by reflecting the actual purchasing power.

Nominal Terms

Values or prices expressed in current money terms, without adjusting for inflation or price level changes.