Capital formation, Microeconomics

Capital formation:

Growth Economists believe that accumulation of capital is one main source of growth of an economy. Emphasis is given to the accumulation of more capital per head (machines, factories, roads etc.). It should however be noted that mere accumulation of capital will not fuel growth. Unless there are areas of investment unexploited, productive capacity cannot be increased merely by increasing the stock of capital.Capital is also only one of the many productive factors of production. If it is increased relative to other factors of production its marginal efficiency falls (MEC).

Technology:

Expansion of knowledge through science and engineering that leads to new inventions and innovations in production techniques play an important role in growth. Technology can either be developed internally or can be imported from other countries.

Posted Date: 1/3/2013 1:00:44 AM | Location : United States







Related Discussions:- Capital formation, Assignment Help, Ask Question on Capital formation, Get Answer, Expert's Help, Capital formation Discussions

Write discussion on Capital formation
Your posts are moderated
Related Questions
Derivation of compensated demand curve:  Hicksian compensated demand function for x 1 is given by x 1 =x 1 (p 1 , p 2 , U), where Hicksian compensated demand curve for a good

STATE AND EXPLAIN SLUTSKYS THEORM?


Special Drawing Rights: SDRs are entitlement granted to member countries enabling them to draw from the IMF apart from their quota. It is similar to a bank granting a credit l

Is Indian companies running a risk by not giving attention to cost cutting? 2. Discuss whether Indian Consumer goods industry is growing at the cost of future profitability. 3. Dis

Labor Total Output 1 30 2 50 3 60 4 75 5 80 a) If the price of the firm’s output is $12 per unit and the wage rate is $100 per worker, how many workers should the firm choose to


how to solve Min (x+y/2, 2y+x, 3x)

Explain how the price system eliminates a surplus. The meaning of surplus is that quantity demanded is less as compared to the quantity supplied.  This will lead to downward pr

why is elasticity important for beachfronf properties