In Equilibrium, What Determines the Price of Capital and What

question 152

Essay

In equilibrium, what determines the price of capital and what determines the price of natural resources?

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Definitions:

Domestic Investment

Financial investments within a country's borders, including infrastructure, buildings, and machinery, contributing to national economic growth.

Foreign-Currency Exchange

The exchange of currencies from various countries against one another.

Net Exports

The value of a country's total exports minus its total imports, representing the net spending on domestic goods and services by the rest of the world.

National Saving

The total amount of saving in a country, equal to the sum of private saving and public saving (or government surplus).