ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A business does not see an immediate increase in revenue when it makes investments in capital goods. An increase in capital investment allows for more research and development in the capital structure.

Detailed explanation-2: -To accumulate additional capital, a country needs to generate savings and investments from household savings or based on government policy. Countries with a high rate of household savings can accumulate funds to produce capital goods faster, and a government that runs a surplus can invest the surplus in capital goods.

Detailed explanation-3: -Rising trade and sweeping technological improvements have led to more efficient production of capital goods. This has helped countries around the world raise real investment and improve living standards.

Detailed explanation-4: -Capital goods serve a critical role in the economy. When companies invest in capital goods, they expand their ability to create products and services. This allows businesses to make a profit and hire employees, and can result in economic growth for society as a whole.