econ

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.

Social Capital or infrastructure.

Capital that provides services to the public. Most takes the for of public works (roads and bridges) and public services (police and fire protection)

Bond

A contract between a borrower and a lender, in which the borrower agrees to pay the loan at some time in the future, along with interest payments along the way.

Capital Stock

For a single firm, the current market value of the firms 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. Major categories are nonresidential structures, durable equipment, residential structures and inventories.

Investment

New capital additions to a firms capital stock. Although capital is measured as 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.

Stock

Ownership claim on a firm, entitling its owner to a profit share.

Expected Rate of Return

The annual rate of return that a firm expects to obtain through a capital investment.

Financial Capital Market

The complex set of institutions in which suppliers of capital (householdls that save) and the demand for capital (firms wanting to invest) interact.

Depreciation

The decline in an assets 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 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.