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Capital account is the credit balance of the books of account, while investment is the debit balance of the books of account. Capital account represents the paid up capital of share, reserve, and surplus. The difference between investment and capital is that capital is a factor of production while investment is not.
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Consumption function refers to the standard equation of consumption which defines the relationship between consumption and income where consumption value can be derived at each level with the use of income value. C= c+ bY where c=autonomous consumption, b= marginal propensity to consume, and Y= income.
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Thus if we consider all the final goods and services produced in an economy in a given period of time they are either in the form of consumption goods (both durable and non-durable) or capital goods. As final goods they do not undergo any further transformation in the economic process.
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Economic Decision-Makers: Households, Firms, Governments, and the Rest of the World. Macroeconomics: Study how decisions of individuals coordinated by markets in the entire economy join together to determine economy-wide aggregates like employment and growth.

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Khushi Kumari 4 years, 5 months ago
1Thank You