An economy's capital stock is increased when individuals and institutions use savings to increase capital investment in stocks and bonds.

Question

Quizplus · Accepted Answer

Savings can be used to purchase stocks and bonds, which in turn provide capital to companies and governments for investment in new projects, infrastructure, and technology. This increases the economy's capital stock, which refers to the amount of physical and financial resources available for production and consumption.

An Economy's Capital Stock Is Increased When Individuals and Institutions