b. Several Periods in the Future
2. The Present Value of a Stream of Future Sums
3. Summary
E. 15.3 The Demand for Capital
- The Firm’s Demand for Capital
a. The Decision to Purchase a Unit of Capital
b. The Firm’s Optimal Capital Stock
a. Increase in Future MRPs
b. Reduction in the Interest Rate
c. From Capital Stock to Investment Demand
d. Emphasis on the Interest Rate - The Economy’s Demand for Investment
F. 15.4 The Supply of Capital - Households’ Supply of Saving
a. Saving and Current Income
b. Saving and Expected Future Income
c. Saving and the Interest Rate - The Economy’s Supply of Saving
G. 15.5 Equilibrium in the Capital Market - The Equilibrium Interest Rate
- Changes in the Market Equilibrium
a. Increases in the Supply of Saving
a. 1. Income Growth
b. 2. Population Growth
c. 3. Policies to Increase Desired Saving
b. Increases in Investment Demand
a. 1. Population and Income Growth