FIGURE 15- 2
-Refer to Figure 15- 2.The market for financial capital is initially in equilibrium at point E1.If the marginal product of capital increases,all other things being equal,the

Question

FIGURE 15- 2 
-Refer to Figure 15- 2.The market for financial capital is initially in equilibrium at point E1.If the marginal product of capital increases,all other things being equal,the

Quizplus · Accepted Answer

When the marginal product of capital increases, the investment demand curve shifts to the right (I2) as firms are willing to invest more at each interest rate, leading to a new equilibrium at E4.