) It represents the rate of return on all successive units of capital without regard to existing capital. ) It shows the rate of return on just those units of capital over and above the existing capital stock. ) The capital stock is taken on the X axis of diagram. ) The amount of investment is taken on the X - axis of diagram.
) It is a “stock” concept. ) It is a “flow” concept. ) It determines the optimum capital stock in an economy at each level of interest rate. ) It determines the net investment of the economy at each interest rate given the capital stock.
- - Consumption and Investment Functions