 from the desired capital stock to investment. Dear students, capital stocks तुच में चेंजिस दो तरा से आती है, और ये दो चेंजिस आपो दे डारेक्छें से आती है. Number one, any purchase of new capital equipment are good. It will increase the existing capital stock. This is called gross investment. And secondly, existing capital stock will depreciate when we will use it. So, this will reduce the existing capital stock. Let me repeat this. In a particular time period, there are two types of changes. Number one, by adding new capital goods and equipment, this will increase the existing capital stock. And secondly, the existing capital stock will depreciate. So, it will reduce the existing capital stock. So, what will be net investment? Net investment will be gross investment minus depreciation. So, we have this on the left hand side. KT plus 1 minus KT and this is equal to IT minus DKT. IT is the gross investment during ERT. KT is the capital stock at the beginning of the ERT. And KT plus 1 is the capital stock at the beginning of the ERT plus 1. Yeah, we can call it like this. At the end of the ERT, your capital stock will be equal to the KT plus 1. So, on the left hand side, we have KT plus 1 minus KT. This is the net increase in the capital stock. This is the net increase in the capital stock. This is equal to IT. IT is the gross investment. We have increased it so much. We have purchased it so much. We have constructed it by building it. Minus DKT. KT is the depreciation rate. KT is the depreciation rate. KT is the depreciation rate. DKT. D is the depreciation rate. The existing capital stock is depreciated at what rate it is used. This is the depreciation rate. And KT is the capital stock. So, when you multiply this rate with existing capital stock, you will get total depreciation. So, in this way, the net increase in the capital stock is 2. Number 1. Gross investment. It means that we have added a lot of new things in it. Minus depreciation. So, if we rearrange this expression, we will get this. This is the gross investment on the left hand side. On the right hand side, you have KT plus 1 minus KT. That is the addition. We have done this in the existing capital stock. In a T time period, plus DKT, the depreciation. So, if firm can change their capital stock in one period, then the desired capital stock will be equal to KT plus 1. Usually, to change the capital stock, we can get it from more than one period. But we assume that whatever we want to change in the capital stock, we can get it in the same time period, in the same year. So, we are denoting the desired capital stock from K star. This is the desired level of capital stock. And this is equal to KT plus 1. So, we replace KT plus 1 with K star. From K star to K star, in the beginning of this year, we plan the capital stock at the end of this year. What is the planning? Obviously, we have read this. This is the project of capital. We are expecting the forecast. It will be based on that. The user's cost will be based on that. So, whatever the firm has planned, at the end of the year, which capital stock will maximize its profit, we are denoting it from K star and replacing it with KT plus 1. So, K star minus KT plus DKT, this is the expression which is expressing your gross investment. IT is the gross investment. K star is the desired level of capital stock which we want to achieve during the year. KT is the capital stock at the beginning of the period T. So, this will be K star minus KT. This will be the change, the net change in the capital stock which we want to increase in one year. Plus DKT, this is the total amount of depreciation of the capital. So, there will be two parts of gross investment, net investment plus depreciation. This concept which we can apply if your period is involved in multiple periods to achieve the desired capital stock. We can apply this concept. Till now, we were talking about fixed capital investment, that the firms want to start a new business. So, if the firms want to increase their inventories, this is also an investment. What is the meaning of inventories? Total stock of unsold goods will be involved. Unfinished products will be part of the inventory and raw material will also be part of the inventory. This is also another form of investment. This will also apply the same rule. Secondly, if we take the housing sector, if we want to invest in the housing sector, then we can apply the same rule. For example, we will talk about housing. If you want to construct a house in housing, then you will also see what is the user cost of your house and what you will get from that benefit. What will be the benefit? You will get a rent, you will have to spend something on its maintenance, you will have to subtract it from the rent, or it will be added in its value. These are the possible benefits of it. And what is the cost of it? That you have to construct it. You will have to pay for the funds required for it. You have to pay for your own funds or you can borrow it from somewhere. We will include it in both the conditions. We will compare it and say if its user cost is less and the benefit is more, then we will invest and otherwise we will not. If we sum up all this, we can say that if there is an increase in the real interest rate, then the desired investment will be less. Why will it be less? We have read that if there is an increase in the interest rate, then the user cost will be increased and the desired capital stock will be less. Similarly, if there is a change in the taxation policy of the government and the effective tax rate increases, then the desired investment will be less as a result of that. And finally, if expected marginal product in the future is less, or if it is more, then it will affect the desired level of investment. Thank you very much.