Because the market system is so important in the U.S.in determining the proportion of current output to be allocated to producing capital goods, there is no policy tool that can influence that allocation.

Question

Quizplus · Accepted Answer

While the market system plays a significant role in determining the allocation of output to capital goods production, there are policy tools such as fiscal and monetary policy that can influence this allocation. For example, government investment in infrastructure projects or tax incentives for businesses to invest in capital goods can shift the allocation towards capital goods production.

Because the Market System Is So Important in the U