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> returning wealth into the economy as something other than capital. This would reduce the oversupply of capital How does one return capital as something other
by justinmk 14y ago
> returning wealth into the economy as something other than capital. This would reduce the oversupply of capital
How does one return capital as something other than capital? And how would that decrease the aggregate supply of capital?
- eli_gottlieb 14y agoYou convert capital into ordinary purchasing power by using the money to buy something. This shifts the money from the column labeled "aggregate capital stock" to "aggregate demand for goods and services."
- justinmk 14y agoGiving money to consumers doesn't lower the aggregate supply of real capital, it just sends false signals to producers (and consumers).