To Avoid the Stock Versus Flow Issue in Production, Some

question 129

Multiple Choice

To avoid the stock versus flow issue in production, some economists discuss capital usage in terms of rented capital. For example, your firm may not directly own some of the capital inputs to your production operation, and these capital inputs are employed on an hourly or daily basis. Which of the following inputs is a good example of a capital input that acts like a flow?

• A) Land and buildings that are owned by the firm
• B) A long-term licensing agreements that allow you to use a patented idea owned by another firm
• C) A forklift that is rented on an hourly basis
• D) all of the above

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Definitions:

Arbitration

A process for the settlement of disputes whereby an impartial third party or board hears the dispute, then makes a decision that is binding on the parties. Most commonly used to determine grievances arising out of a collective agreement, or in contract disputes.

Automobiles

Motor vehicles with four wheels designed primarily for passenger transportation on public roads.

Caveat Emptor

Latin: “Let the buyer beware.”

Consumer Protection Legislation

Laws and regulations designed to safeguard the rights and interests of consumers against unfair practices by businesses.