U.S. capital at the end of 2012 equals U.S. capital at the ...

[saraeharris]

U.S. capital at the end of 2012 equals U.S. capital at the beginning of 2012 plus
 
  A) gross investment during 2012.
  B) net investment during 2012.
  C) nothing, because capital can't change in just one year.
  D) gross investment during 2012 minus net investment in 2012.
  E) depreciation during 2012 minus gross investment during 2012.

Question 2

What effect does an increase in the nominal interest rate have on the opportunity cost of holding money and on the demand for money curve?
 
  What will be an ideal response?

[blakeserpa]

Answer to Question 1

B

Answer to Question 2

An increase in the nominal interest rate increases the opportunity cost of holding money. There is a movement upward along the demand for money curve.