capital formation

The creation of capital. For example, capital is created when banks lend the money they hold in savings accounts to firms that use the money to purchase machinery.


Nearby words

  1. capital asset,
  2. capital assets,
  3. capital budget,
  4. capital expenditure,
  5. capital flight,
  6. capital gain,
  7. capital gains,
  8. capital gains tax,
  9. capital goods,
  10. capital investment

The New Dictionary of Cultural Literacy, Third Edition Copyright © 2005 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.