2 Neoclassical model of investment continued Using the neoclassical model of investment, explain the impact of each of the followings on 1) the rental price of capital, 2) the cost of capital, and 3) investment: 1. Inationary monetary policy lowers the real interest rate. 2. A new technology in invented which improves productivity. 3. A xenophobic government comes into power and restricts immigration of foreign workers, decreasing the size of the labor force