Which of the following is likely to happen if there is an increase in entrepreneurial activity in an economy?
A) The income per capita in the economy will fall.
B) The productivity of the economy will increase.
C) The inflation rate in the economy will decrease.
D) The exchange rate of its currency in the foreign exchange market will increase.

Question

Quizplus · Accepted Answer

An increase in entrepreneurial activity indicates a rise in the number of new businesses and start-ups in the economy. This is likely to increase the productivity of the economy by creating new job opportunities, increasing competition, and boosting innovation and technological advancements. It may also generate higher income levels and contribute to economic growth. Therefore, option B is the correct choice. Option A is incorrect because a higher level of entrepreneurial activity does not necessarily result in a decrease in income per capita. Option C is also incorrect because entrepreneurial activity does not always impact the inflation rate of an economy. Option D has no relation to entrepreneurial activity and therefore is also incorrect.

Which of the Following Is Likely to Happen If There