Which of the following would encourage economic growth through increases in the capital stock?

Question

Quizplus · Accepted Answer

An increase in the profitability of new investment due to technological change would encourage firms to invest in new capital, leading to an increase in the capital stock. An increase in household saving would provide funds for investment in new capital, again leading to an increase in the capital stock. A decrease in the government deficit means that the government is borrowing less, leaving more funds for private investment, which can also increase the capital stock. Therefore, all of the above options would encourage economic growth through increases in the capital stock.

Which of the Following Would Encourage Economic Growth Through Increases