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According to New Growth Theory,the Accumulation of ________ Capital Is

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According to new growth theory,the accumulation of ________ capital is subject to diminishing returns at the ________ level,but not at the level of the economy as a whole.


Definitions:

Nondiversifiable Risk

A type of risk that affects all investments across the market and cannot be eliminated through diversification.

Diversifiable Risk

A type of investment risk that can be reduced or eliminated in a portfolio through diversification, as it is not correlated with market movements.

Risk Premium

The extra return expected by an investor for holding a risky asset, over and above the risk-free rate.

Discount Rate

The interest rate used in calculating the present value of future cash flows. It reflects the time value of money and risk.

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