Questions

‘Brand’ refers to a particular identity or image regarded as an asset. ‘Stock’ refers to the capital raised by a company or corporation through the issue and subscription of shares. ‘Bond’ is an interest-bearing security issued by governments, companies and some other organisations. ‘Barter’ refers to exchange (goods or services) for other goods or services without using money. ‘Bankruptcy’ means the state of being bankrupt. The given blanks can either use ‘bond’ or ‘stock’ as both are similar in meaning. Bonds and stocks are both securities, but the major difference between the two is that (capital) stockholders have an equity stake in a company (that is, they are owners), whereas bondholders have a creditor stake in the company (that is, they are lenders). Being a creditor, bondholders have priority over stockholders. Thus, ‘bond’ is the best fit word for the given blanks as it is clearly stated that it is a form of loan. This makes option 3 the correct answer.

Capital deepening is a situation where the capital per worker is increasing in the economy. This is also referred to as increase in the capital intensity. Capital deepening is often measured by the rate of change in capital stock per labour hour.