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For the Profit-Maximizing Firm, If the Real Interest Rate Is

Question 65

Multiple Choice

For the profit-maximizing firm, if the real interest rate is greater than the marginal product of capital, the firm should:


A) invest in more capital.
B) get rid of some capital.
C) keep its capital stock the same, as there is a risk premium attached to the real interest rate.
D) hire more workers.
E) buy stocks.

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