Explain the distinction between investment and capital
Investment is the flow of resources into the production of new capital; it is the process of construction of new plant and equipment during some period of time. Capital is the stock of plant, equipment, and other productive resources created in the investment process. Capital is measured at a moment in time and is increased when net new investment occurs. The key distinction is that capital is a stock, while investment is a flow. Capital is measured as a certain amount as of a particular date, while investment is measured as a certain amount per time period.
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Which of the following statements is TRUE?
A) Both wealth and income measure variables over a period of time. B) Wealth measures a variable at a point in time and income measures a variable over a period of time. C) Wealth measures a variable over a period of time, and income measures a variable at a point in time. D) Both wealth and income measure variables at a point in time.
A consumer's optimal choice is affected by income, prices of goods, and preferences
a. True b. False Indicate whether the statement is true or false