Changes in the capital stock will often lead to changes in wages.

Question

Quizplus · Accepted Answer

Changes in the capital stock, which refers to the machines, tools, and equipment used in production, can increase productivity and efficiency. This, in turn, allows firms to pay higher wages to workers, as they are able to produce more output in less time. Conversely, a decrease in the capital stock may lead to lower wages as productivity and efficiency decline. Therefore, changes in the capital stock can have a significant impact on wages.

Changes in the Capital Stock Will Often Lead to Changes