Define capital. Explain the relationship between investment and capital

What will be an ideal response?


Capital is those goods produced by the economic system that are used as inputs in the production of future goods and services. Investment is a flow and capital is stock. Investment increases the stock of capital.

Economics

You might also like to view...

Those who favor changes in the market for health care that would make it more like the markets for other goods and services favor what are generally known as market-based reforms

Indicate whether the statement is true or false

Economics

Which of the following properties hold true for the equilibrium price-quantity combination?

a. Buyers who are willing to pay higher than the equilibrium price do not find sellers. b. At the equilibrium price producer surplus equals consumer surplus. c. The equilibrium output is produced at the lowest avoidable cost. d. The equilibrium output is produced at the lowest opportunity cost.

Economics

A country currently is using all its land to produce wheat and grapes. However, the land most suited to growing grapes is being used to produce wheat, and the land most suited to growing wheat is being used to produce grapes. Which of the following statements is true?

a. The country is operating outside of its production possibilities frontier. b. The country is operating along its production possibilities frontier. c. Wheat production must be sacrificed if the country increases grape production. d. Grape production must be sacrificed if the country increases wheat production. e. The country is operating inside its production possibilities frontier.

Economics

An answer to the question "How are goods produced?" determines:

A) who receives the goods that are produced. B) how tastes and preferences are determined. C) how resources are combined in the production of goods. D) the types and quantities of goods and services produced.

Economics