To avoid the stock versus flow issue in production, some economists discuss capital usage in terms of rented capital. For example, your firm may not directly own some of the capital inputs to your production operation, and these capital inputs are employed on an hourly or daily basis. Which of the following inputs is a good example of a capital input that acts like a flow?

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A forklift that is rented on an hourly basis is a good example of a capital input that acts like a flow because it is employed on an hourly basis and is not owned by the firm, avoiding the stock versus flow issue in production. Land and buildings that are owned by the firm and a long-term licensing agreement that allows the firm to use a patented idea are examples of capital inputs that act like a stock because they are owned by the firm and are not employed on an hourly or daily basis.

To Avoid the Stock Versus Flow Issue in Production, Some