When the economy devotes more of its resources to investment goods, it must devote fewer resources to consumer goods.

Question

Quizplus · Accepted Answer

Investment goods are those goods that are used in the production of other goods and services, such as machinery and buildings. If the economy devotes more resources to producing investment goods, it means there are fewer resources available for producing consumer goods, which are goods that are directly consumed by individuals for their satisfaction. Therefore, the statement is true.

When the Economy Devotes More of Its Resources to Investment