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Essay

Capital in the Market and Economy

Essay specific features

 

Issue:

Miscellaneous

 

Written by:

William B

 

Date added:

November 19, 2014

 

Level:

University

 

Grade:

B

 

No of pages / words:

2 / 448

 

Was viewed:

3476 times

 

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Essay content:

While you are saving, someone is paying interest (your capital) on the money you saved, because they have borrowed it to pay for capital investments such as land, a building, machinery, etc. in order to improve their overall production. If we look at capital in a working environment, we see that when we increase capital goods for workers, they can be more productive...
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This works up to a point. The law of diminishing returns declares that a general increase in output occurs when capital goods per worker increase, but there comes a point where each increase in capital goods produces a lesser impact on output. At this point, the number of human capital (workers) needs to be increased to utilize the capital goods already in place and continue to improve efficiency...
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