Micro Chapter 11: Input Demand: The Capital Market and the Investment Decision
Capital Stock
for a single firm, the current market value of the firms plant, equipment, inventories, and intangible assets
Human Capital
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
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
Capital Market
market in which households supply their savings to firms that demand funds to buy capital goods
Physical Capital
material things used as inputs in the production of future goods and services
Intangible Capital
nonmaterial things that contribute to the output of future goods
Financial Capital Market
part of the capital market in which savers and investors interact through intermediaries
Dividend
payment made to shareholders of a corporations
Expected Rate of Return
the annual rate of return that a firm expects to obtain through a capital investment
Capital
those goods produced by the economical system that are used as inputs to produce other goods and services in the future
Depreciation
decline in an asset's economic value over time
Interest
Payments made for the use of money
Bond
a contract between a borrower and a lender, in which the borrower agrees to pay the loan at some time in the future
Investment
a flow that increases the stock of capital
Common Stock
a share of stock is an ownership claim on a firm, entitling its owner to a profit share
Social Capital
capital that provides services to the public