Question

The aggregate supply and employment in the economy depends upon the stock of __________, its quality and use.

• A. inventory
• B. capital
• C. either A or B
• D. neither A nor B

Answer 1

The correct option is B capital

Capital refers to the amount which is been invested by the owners of the firm which is used to employ people to work in the production process and also to acquire assets which is used in the production process, Therefore, he aggregate supply and employment depends on the quality and use of this stock of capital because if it is not used efficiently then it will not yield the desired level of output.