Accumulating capital
A)requires that society sacrifice consumption goods in the present.
B)allows society to consume more in the present.
C)decreases saving rates.
D)involves no tradeoffs.

Question

Quizplus · Accepted Answer

Accumulating capital involves setting aside resources to invest in capital goods that can increase production in the future. This requires sacrificing consumption goods in the present, as resources are diverted towards building capital. Therefore, choice A is the correct answer. Choice B is incorrect because accumulating capital does not necessarily result in greater consumption in the present, but rather in the future. Choice C is incorrect because accumulating capital involves increasing saving rates, not decreasing them. Choice D is also incorrect because accumulating capital involves tradeoffs between present consumption and future production.

Accumulating Capital