Additions to the nation's capital stock are brought about through
A) the current account surplus.
B) investment.
C) investment and the current account surplus.
D) investment and the government budget surplus.
E) government deficit.

Question

Quizplus · Accepted Answer

Additions to the nation's capital stock are brought about through investment, which refers to spending on physical capital and technology with the aim of increasing productive capacity. The other choices are not directly related to capital accumulation, as the current account surplus refers to the difference between a country's exports and imports, the government budget surplus refers to the excess of tax revenue over government spending, and the government deficit refers to the shortfall between government revenue and spending. While these factors can indirectly affect capital formation, investment is the primary driver of capital accumulation.

Additions to the Nation's Capital Stock Are Brought About Through