Answer to Question #178568 in Economics for Lukyamuzi Jude

Question

With examples, explain 3 circumstances through which capital accumulation can lead to fall in rate of profits??

Answer 1

Capital accumulation is the dynamic that motivates the pursuit of profit, involving the investment of money or any financial asset with the goal of increasing the initial monetary value of said asset as a financial return whether in the form of profit, rent, interest, royalties or capital gains.

Many economists argue that capital accumulation leads to inequality in society.

On the other hand, others argue that a general increase in the wealth of a nation results in a redistribution of overall wealth.