Author Question: Firms discount future profits at the interest rate r because A) it is the interest rate on their ... (Read 141 times)

littleanan · **on:** Jun 30, 2018

Firms discount future profits at the interest rate r because

A) it is the interest rate on their debt.
B) it is the same rate as for households.
C) Ricardian equivalence holds.
D) it has to equal the marginal productivity of capital in equilibrium.

Question 2

Consumption expenditure includes

a. the production of consumption goods not sold and held in inventory.
b. the purchase of consumption goods made domestically but consumed by foreigners.
c. purchase of goods and services by local government.
d. services, durables, and non-durable goods.