ECONOMICS
TECHNOLOGY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Investments in capital goods typically lead to a decrease in GDP.
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Investments in capital goods typically lead to an increase in GDP
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A decrease in GDP typically leads to investments in capital goods
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A increase in GDP typically leads to investments in capital goods
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Detailed explanation-1: -Which statement best describes the relationship between a country’s investment in capital goods and its gross domestic product (GDP)? Investments in capital goods typically lead to a decrease in GDP.
Detailed explanation-2: -When a country invests in human capital it has the ability to foster more entrepreneurs, the more entrepreneurs a country has the higher the GDP.
Detailed explanation-3: -Investment in physical capital relates to a higher GDP. More advanced factories, machinery, and technology creates a more productive workforce, which leads to greater economic growth [higher GDP].
Detailed explanation-4: -Investment and Economic Growth. Investment adds to the stock of capital, and the quantity of capital available to an economy is a crucial determinant of its productivity. Investment thus contributes to economic growth.
Detailed explanation-5: -Human capital formation raises the production level and leads to economic growth by adding to GDP.