Devoting more of a country's resources for producing consumer goods means

Question

Quizplus · Accepted Answer

Devoting more resources for producing consumer goods means that there are fewer resources available for producing investment goods which leads to slower growth in the long run. Investment goods are the ones that increase productivity and the economy's capacity to produce in the future. Therefore, focusing on producing more consumer goods reduces the economy's ability to invest in assets that could lead to higher productivity and growth in the future.

Devoting More of a Country's Resources for Producing Consumer Goods