If the Price Index for Capital Goods Is the Same

Multiple Choice

If the price index for capital goods is the same as the price index for other goods, an index of the real cost of capital for investment, in the absence of taxes, may be summarized as the:

A) nominal interest rate plus the depreciation rate.
B) real interest rate plus the depreciation rate.
C) purchase price of a capital good multiplied by the sum of the nominal interest rate plus the depreciation rate.
D) purchase price of a capital good multiplied by the sum of the real interest rate plus the depreciation rate.