In an Edgeworth-box analysis of production, the size of the capital stock is determined by previous

Question

Quizplus · Accepted Answer

The size of the capital stock is determined by previous amounts of investment and depreciation because these factors affect the amount of capital used in production. Investment increases the capital stock, while depreciation decreases it. Therefore, these factors are critical in determining the size of the capital stock in an Edgeworth-box analysis of production. Birth rates and death rates do not directly affect the capital stock and are thus not relevant in this context.

In an Edgeworth-Box Analysis of Production, the Size of the Capital