Why does capital depreciate? What will be an ideal ...

[rlane42]

Why does capital depreciate?
 
  What will be an ideal response?

Question 2

Which of the following describes what the Fed would do to pursue an expansionary monetary policy?
 
  A) use discount policy to raise the discount rate
  B) use open market operations to sell Treasury bills
  C) raise the reserve requirement
  D) use open market operations to buy Treasury bills

[yasmina]

Answer to Question 1

Capital can depreciate because it wears out physically or because it becomes obsolete.

Answer to Question 2

D