Explain the meaning of the term dead capital, and discuss why its existence retards economic growth
What will be an ideal response?
Dead capital means a capital resource without a clearly defined owner. Although dead capital is often used in production the lack of clearly defined title of ownership typically leads to inefficient use of the resource. The inefficient use of dead capital reduces the rate of return on investments and thus the incentive to increase investment in capital goods are reduced. Lower levels of capital investment diminish the rate of economic growth.
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What can the central bank of Autarkia do to lower the rate which banks charge each other for overnight loans? How will this affect the economy if it is facing a downturn?
What will be an ideal response?
Workers can reduce the chance of an employer lying by
A) obtaining more information about the firm's performance. B) having a representative on the board of directors. C) requiring that employers share the cost of an economic downtown. D) All of the above.