(b) Suppose that there is an increase in demand of 3%. Calculate the increase in the desired capital stock as a percent of production. Q8. Quantifying the accelerator effect. Suppose the capital intensity of production (a) is 0.3, the mark-up is 20%, the depreciation rate is 6% and the real interest rate is 4%. (a) Use the equation for the desired capital stock in the short run [MPK / (1 + p.) 6 = r] to calculate the desired capital stock relative to production (you may assume a Cobb-Douglas production function if you like)