Explain How an Increase in the Stock of Capital Can

question 18

Essay

Explain how an increase in the stock of capital can increase output even if it is not accompanied by an increase in the labor force.

---

Definitions:

Municipal Bond Yields

The return investors can expect to earn if they hold a municipal bond until maturity, often tax-exempt.

Corporate Bond Yields

The interest income received from holding corporate bonds, expressed as a percentage of the bond's price.

Eurodollars

US dollars deposited in banks outside the United States, often used for international transactions and investing.

Dollar-Denominated Deposits

Bank deposits made in U.S. dollars rather than the local currency, often used by investors to avoid foreign exchange rate risk.