Answer to Question #104332 in Microeconomics for Mfumo

Question #104332
Why is capital formation important in South Africa
1
Expert's answer
2020-03-02T08:43:58-0500

Fixed capital formation is an important but generally volatile component of aggregate spending. It is important in that it adds to the productive capacity of an economy. It is value-adding in the sense that it contributes to the growth potential of an economy, but it tends to be volatile as it entails substantial capital commitments based on uncertain expectations


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