Chapter 11
capital stock
for a single firm, the current market value of the firm's plant, equipment, inventories, and intangible assets
capital income
income earned on savings that have been put to use through financial capital markets
interest rate
interest payments expressed as a percentage of the loan
physical or tangible, capital
material things used as inputs in the production of future goods and services. The major categories of physical capital are nonresidential structures, durable equipment, residential structures, and inventories
investment
new capital additions to a firm's capital stock. Although capital is measured at a given point in time (a stock), investment is measured over a period of time (a flow). The flow of investment increases the capital stock
intangible capital
nonmaterial things that contribute to the output of future goods and services
dividend
payment made to shareholders of a corporation
expected rate of return
the annual rate of return that a firm expects to obtain through a capital investment
depreciation
the decline in an asset's economic value over time
capital market
the market in which households supply their savings to firms that demand funds to buy capital goods
financial capital market
the part of the capital market in which savers and investors interact through intermediaries
interest
the payments made for the use of money
capital
those goods produced by the economic system that are used as inputs to produce other goods and services in the future
bond
a contract between a borrower and a lender, in which the borrower agrees to pay the loan at some time in the future. Some bonds also make regular, constant payments once or twice a year
human capital
a form of intangible capital that includes the skills and other knowledge that workers have or acquire through education and training and that yields valuable services to a firm over time
common stock
a share of stock is an ownership claim on a firm, entitling its owner to a profit share
social capital, or infrastructure
capital that provides services to public. Most social capital takes the form of public works (roads and bridges) and public services (police and fire protection)
