The concepts of stock and flow are involved in firms' demand for labour and for capital.Which of the following statements is correct?
A) A firm hires a stock of labour services; and purchases a stock of physical capital,which provides a flow of services.
B) Labour and capital are both flow variables because their values change over time.
C) A firm hires a flow of labour services; and purchases a stock of physical capital,which provides a flow of services.
D) Labour and capital are both stock variables because they are providing service at any given moment in time.
E) A firm's demand for both labour and capital is determined by the marginal value each provides to the stock of labour and capital,respectively.
Correct Answer:
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