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
Shifting the PPF Curve To raise the manufacturing of one good without reducing the production of the other, the PPF curve should shift outward. The PPF curve shifts outward as

Explain the link between the rate of interest and inflation. Interest can be explained as the price of money - more expensive money will lead to few loans, higher saving and as

The enzymes are highly specific in nature. During enzymatic reaction the enzyme is so built that it binds to the substrate in a specific manner. The stepwise mechanism of enzyme ca

Discrimination: As a result of sexist and racist attitudes and deliberate efforts of employers to oppose groups of workers against each other, different groups of people (divided a

the existance of a labor marketcharacterised by perfect competition is a fallacy.discuss

Quality Control: Standards and standardisation, quality systems, certification and inspections, measurement systems, testing laboratories, their accreditation and calibration

what do you understand by production posibility curve?

examples of quantity demand when prices increase

Expected Value - The weighted average of payoffs or values resulting from all the possible outcomes. The probabilities of every outcome are used as weights Expected

Major air pollutants can be sub divided into 2 catexampleories: Inorganic gases and particular gases. (A) Inorganic gases 1. Carbon monoxide (CO) CO is a colourless, lethal gas