ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -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-2: -Capital goods are one of the four leading economic factors. An increase in orders and shipments of capital goods is a sign that businesses expect more demand and that the economy will grow.

Detailed explanation-3: -The formation of human capital raises production levels and leads to economic growth by adding to the GDP. Knowledgeable and skilled workers can make better use of resources at their disposal.

Detailed explanation-4: -Human capital allows an economy to grow. When human capital increases in areas such as science, education, and management, it leads to increases in innovation, social well-being, equality, increased productivity, improved rates of participation, all of which contribute to economic growth.