Question: Using the supply-and-demand analysis of interest, explain how each of the following would affect interest rates in capital theory: a. An innovation that increased the

Using the supply-and-demand analysis of interest, explain how each of the following would affect interest rates in capital theory:

a. An innovation that increased the marginal product of capital at each level of capital

b. A decrease in the desired wealth holdings of households

c. A 50 percent tax on the return on capital (in the short run and the long run)

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