The process of using current resources to create or buy new capital is called
A) absolute advantage.
B) comparative advantage.
C) investment.
D) the law of increasing relative cost.
E) economic growth.

Question

Quizplus · Accepted Answer

Investment refers to the process of using current resources to create or buy new capital, which is vital for economic growth. Absolute advantage refers to a country's ability to produce a particular good or service more efficiently than another country. Comparative advantage refers to a country's ability to produce a particular good or service at a lower opportunity cost than another country. The law of increasing relative cost states that as the production of a particular good increases, the opportunity cost of producing another good also increases. Economic growth refers to the increase in the capacity of an economy to produce goods and services over time. Therefore, the best choice for this question is (C) investment.

The Process of Using Current Resources to Create or Buy