Private investment expenditure,which is a flow,affects the stock of capital.

Question

Quizplus · Accepted Answer

Private investment expenditure is a flow, i.e., it refers to the amount of investment spending during a particular time period. This investment spending, in turn, helps to increase the stock of capital, which is a stock variable, i.e., it refers to the total amount of productive assets or equipment available in the economy at a given point in time. Therefore, private investment expenditure does affect the stock of capital in the economy, and hence, option A is the correct answer.

Private Investment Expenditure,which Is a Flow,affects the Stock of Capital