The production of capital goods:

Question

Quizplus · Accepted Answer

The production of capital goods often requires resources and labor that could have been used for producing consumption goods, hence a sacrifice in current consumption is made for the production of capital goods.

Answer: D
 B and C are incorrect, as the production of capital goods can lead to increased employment and can increase a nation's productive capacity in the future. However, option A is correct as the trade-off between current consumption and investment in capital goods is a fundamental economic reality.

The Production of Capital Goods