a bond _____increases the quantity of capital and____ decreases the quantity of capital. Economists use the term human capital to describe the present value of future labor income. In finance and accounting, capital generally refers to financial wealth, especially that used to start or maintain a business.. as economists use the term, depreciation is a) using some of your savings to buy a car b) a GM shareholder selling some of her stock c) an increase in sales decreasing a firm's inventories d) a tax accountant's knowledge of the tax code becoming outdated as new tax laws are passed C. Refers To The Process By Which Resources Are Transformed Into Useful Forms. Question: Capital, As Economists Use The Term, A. refers to the process by which resources are transformed into useful forms. refers to things that have already been produced that are … Capital has a number of related meanings in economics, finance and accounting.. B. Labor income is the income earned from labor; e.g., job income or salary. 1) Economists use the term capital to describe that factor of production that includes human-made resources such as factories, buildings, machinery and tools. Present value, as it applies to human capital, is today's value of future income, discounted by an assumed interest rate (discount rate). The issue becomes even more pressing once the changing pattern of capital in advanced economies is taken into account. The cash needed to start a new business. In economics, capital consists of human-created assets that can enhance one's power to perform economically useful work. Question 3 2 pts Capital, as economists use the term, refers to Final goods that are used to produce other goods and services, The costs of operating a business. Is Money The Firm Raises From Selling Stock. "Capital" in Economics . Classical economic theory begins for all practical purposes with the writings of Adam Smith (1723-1790), especially Smith's Wealth of Nations. Physical capital is one of the three main factors of production in economic theory. This alone constitutes sufficient grounds for economists to review their theoretical treatment of intangibles. Shares of stock issued by businesses. Before exactly defining the ‘Capital’, we shall examine some of the definitions given by different economists: “Capital consists of all those goods, existing at present time which can be used in anyway, so as to satisfy wants during the subsequent years”. investment; depreciation. Definitions of Capital:. His view of capital was specific. what a person owns. Capital, as economists use the term, is the money the fir m spends to hire resources. Is The Money The Firm Spends To Hire Resources. 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