Business assets {capital, business}| can be actual equipment {real capital}, existing capital {capital stock}, or money {money capital} that can be for investment. Businesses add new capital each period {capital flow}. Capital has a percentage return per year on cost {marginal revenue product, capital}. Investment in capital is wise if capital marginal revenue product is higher than interest rate. Ideally, interest rate equals national capital average marginal revenue product.
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6-Economics-Microeconomics-Production-Factors
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Date Modified: 2022.0224