Investment in both physical and human capital tends to enhance economic growth because it generally
A) increases consumption during the current period.
B) makes it possible for individuals to produce more goods and services per hour worked.
C) encourages firms to expand output by employing more low productivity workers.
D) encourages workers to unionize and thereby fight for higher wages.

Question

Quizplus · Accepted Answer

Investment in physical and human capital improves the production efficiency and productivity of workers, which leads to increased output per hour worked. As a result, the economy grows as a whole.

Investment in Both Physical and Human Capital Tends to Enhance