A firm hires a stock of labour services; and purchases a stock of physical capital,which provides a flow of services.
Labour and capital are both flow variables because their values change over time.
A firm hires a flow of labour services; and purchases a stock of physical capital,which provides a flow of services.
Labour and capital are both stock variables because they are providing service at any given moment in time.
A firm's demand for both labour and capital is determined by the marginal value each provides to the stock of labour and capital,respectively.
they reduce the amount of trade by charging high fees for their services.
they are not essential for the workings of an economy.
they specialize in assessing the risk of various borrowers.
are the fundamental determinant of the supply of capital.
are the fundamental determinant of the demand for capital.
To connect the savings decisions of households with the borrowing decisions of firms.
To provide the means by which firms can acquire physical capital.
To provide the means by which households and firms can invest financial capital.
To connect firms and households who wish to borrow with financial institutions.
To connect households who wish to borrow with banks who wish to lend.
flow; opportunity cost
retained asset; spent asset
households' savings accounts
education and retirement savings
private-sector pension plans
Canada Pension Plan and Quebec Pension Plan
all of the above