For an economy to expand its investment in the production of capital goods,it must

Question

Quizplus · Accepted Answer

In order to produce more capital goods, a country must allocate more resources towards the production of capital goods. This means that it must forego some production of consumer goods and services, as resources cannot be used for both. Therefore, option B is the correct choice.

A. While technology can help improve the efficiency of production, it does not necessarily lead to an increase in the production of capital goods.

C. Expanding geographic territory may bring access to new resources, but it does not directly translate into an increase in the production of capital goods.

D. Increasing the real supply of money could lead to inflation and does not necessarily lead to an increase in the production of capital goods.

E. Reducing the level of savings by consumers would increase the level of consumption, but it does not necessarily translate into an increase in the production of capital goods.

For an Economy to Expand Its Investment in the Production