Question

Explain how the capital adjustment process affects the allocation of resources among industries and the social division of labor.

Answer 1

the capital adjustment process affects the allocation of resources among industries and the social division of labor : as the industries with higher capital assets can afford more resources and industries with lower capital assets get low resources. The proper capital adjustment increases the investment of industries which leads to effective allocation of resources. The social division on labour can be a reason of capital adjustment because the capital management and investment by industries and firms leads to division of labour as per their skills and abilities.