Question

Anyone know this ? It’s Econ ;)

Answer 1

Answer:

D. An increase in investment in capital goods usually leads to an increase in productivity.

Explanation:

An economy is a function of how money, means of production and resources (raw materials) are carefully used to facilitate the demands and supply of goods and services to meet the unending needs or requirements of the consumers.

Thus, a region's or country's economy is largely dependent on how resources are being allocated and utilized, how many goods and services are to be produced, what should be produced, for whom they are to be produced for and how much money are to be spent by the consumers to acquire these goods and services.

Economic growth is an increase in the production of goods, labor force, capital goods, technology and services in an economy measured in terms of Gross Domestic Products (GDP) over a period of time.

Hence, the statement which best describes how investment in capital goods impacts economic growth is that, an increase in investment in capital goods usually leads to an increase in productivity i.e increase in the level of production within a particular economy.