The nation's supply of productive resources increases if
A)investment is greater than depreciation.
B)investment equals depreciation.
C)investment is less than depreciation.
D)Both answers A and B can be correct.
E)None of the above answers are correct because the relationship between investment and depreciation has no bearing on the amount of the nation's productive resources.

Question

Quizplus · Accepted Answer

Investment represents additions to the stock of capital which in turn increases the stock of productive resources. Depreciation, on the other hand, represents the decrease in the stock of capital. Thus, if investment is greater than depreciation, there is a net increase in the stock of productive resources, leading to economic growth.

The Nation's Supply of Productive Resources Increases If