Q^. = rq - (lambda)(k(t)) From this equation it can be understood that a permanent decline in the interest rate shifts the q locus up. Since the capital stock cannot adjust instantly, existing capital earns rent, and so its market value rises. The higher market value of capital attracts investment and so the capital stock begins to rise. In addition, since 'r' multiplies q in the equation, for q locus the decline makes the locus steeper.