Question: Can someone help me with these questions? 1)Show graphically how a decrease in the depreciation rate will affect the optimal capital stock and hence investment.

Can someone help me with these questions?

1)Show graphically how a decrease in the depreciation rate will affect the optimal capital stock and hence

investment.

2)Show graphically how an increase in animal spirits (SP), which increases the expected MPK, will

affect the optimal capital stock and hence investment. Assuming here that the firm uses the following

condition to make the investment choice MPK (K, SP) = r + and MPK(K, SP) is increasing in

animal spirits SP.

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