ECONOMICS
ECONOMIC GROWTH
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Keeping old taxi cabs
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Keeping old machinery in order to save
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Purchasing new computer software for the business
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Training workers new skills for the job
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Detailed explanation-1: -Investing in Physical Capital A firm invests in itself by buying capital that it uses to improve what it does. In other words, it invests in physical capital to earn higher profits in the future. For example, a firm might invest in new technology to increase the productivity of its employees.
Detailed explanation-2: -Equipment, machinery, computers, buildings, and other assets created by humans to produce goods or services from raw materials belong to the physical capital.
Detailed explanation-3: -Physical capital includes the tools, machines, equipment, and buildings used to produce goods or perform services. Hammers, computers, rulers, and pencils are all examples of physical capital.
Detailed explanation-4: -The supportive explanation is mentioned as follows: (d) Purchasing and installing new equipment for the manufacturing process determines investment in physical capital by a firm.