宏观经济学 曼昆 习题答案 章节18.pdf

C H A P T E R 18 Investment Questions for Review 1. In the neoclassical model of business fixed investment, firms will find it profitable to add to their capital stock if the marginal product of capital is greater than the cost of capital. The cost of capital depends on the real interest rate, the depreciation rate, and the relative price of capital goods. 2. Tobin’s q is the ratio of the market value of installed capital to its replacement cost. Tobin reasoned that net investment should depend on whether q is greater or less than one. If q is greater than one, then the stock market values installed capital at more than it costs to replace. This creates an incentive to invest, because managers can raise the market value of their firms’ stock by buying more capital. Conversely, if q is less than one, then the stock market values installed capital at less than its replacement cost. In this case, managers will not replace capital as it wears out. This theory provides an alternative way to express the neoclassical model of investment. If the marginal product of capital exceeds the cost of capital, for example, then installed capital earns profits. These profits make the firms desirable to own, which raises the market value of these firms’ stock, implying a high value of q. Hence, Tobin’s q captures the incentive to invest because it reflects the current and expected future profitability of capital. 3. An increase in the interest rate leads to a decrease in residential investment because it reduces housing demand. Many people take out mortgages to purchase their homes, and a rise in the interest rate increases the cost of the loan. Even for people who do not borrow to buy a home, the i