A less developed country can increase its capital stock by

Question

Quizplus · Accepted Answer

Shifting resources away from production of consumer goods and toward production of capital goods will increase the capital stock of a less developed country. Consumer goods do not contribute to future production and hence do not add to the capital stock. Capital goods, on the other hand, are used in the production of other goods and services and increase the future production capacity of the country. By producing more capital goods, the less developed country can increase its capital stock and become more productive and prosperous in the long run.

A Less Developed Country Can Increase Its Capital Stock by