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Questions › DSE › DSE 2005 › Q30
2 marks, −1Macroeconomics › Consumption and investment › Tobin's q and the user cost of capitalHardabout 3 min

DSE 2005 Question 30: Consumption and investment

The desired stock of capital is ____ in the marginal product of capital and ____ in the expected future price of capital.

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Consumption and investment has come up 74 times in 7 exams since 2005.

What this question tests

This question is on Tobin's q and the user cost of capital, part of Consumption and investment in Macroeconomics.

Modern theories of investment based on the market value of capital and its rental cost.

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Question from the DSE 2005 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.