The capital stock in an economy stops growing when:

Question

Quizplus · Accepted Answer

Capital stock grows as long as the investment in the economy is greater than the depreciation of existing capital. Once the investment equals the depreciation, there is no net increase in the capital stock. Therefore, option A is the correct answer. Option B, savings increasing in the economy, may lead to more investment, but it does not necessarily mean that the capital stock will stop growing. Option C, depreciation reaching zero, is not possible as depreciation is a natural process for capital goods. Option D, capital accumulation beginning, is not a condition for capital stock growth to stop but rather the start of it.

The Capital Stock in an Economy Stops Growing When