Which of the following statements,if any,is correct for a nation that is producing only consumer and capital goods?
A) Other things equal,the more consumer goods a nation produces,the greater will be its future growth rate.
B) Other things equal,the more capital goods a nation produces,the greater will be its future growth rate.
C) There is no general relationship between the current division of output between consumer and capital goods and the future growth rate.
D) None of these statements is correct.

Question

Quizplus · Accepted Answer

The production of capital goods helps in creating more productive capacity and hence, leads to increasing economic growth in the long run. Therefore, other things equal, the more capital goods a nation produces, the greater will be its future growth rate.

Which of the Following Statements,if Any,is Correct for a Nation