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Which of the following statements is correct? a. An increase in the real interest rate (r) will, ceteris paribus, increase the rental rate of machines

Which of the following statements is correct?

a. An increase in the real interest rate (r) will, ceteris paribus, increase the rental rate of machines (capital); this will prompt firms to decrease their capital usage.

b. An increase in the real interest rate (r) will, ceteris paribus, increase the rental rate of machines (capital); this will prompt firms to increase their capital usage.

c. An increase in the real interest rate (r) will, ceteris paribus, decrease the rental rate of machines (capital); this will prompt firms to increase their capital usage.

d. All of the above

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