Studies generally show that if there is more investment in capital goods in DVCs, there will be greater:

Question

Quizplus · Accepted Answer

Investment in capital goods leads to an increase in productivity, which in turn leads to economic growth. Therefore, option B is the best choice as it correctly identifies the positive relationship between capital goods investment and economic growth. Option A is incorrect because capital flight refers to the movement of money out of a country and is not related to investment in capital goods. Option C and D are incorrect as investment in capital goods is likely to decrease underemployment and unemployment as it increases productivity and output.

Studies Generally Show That If There Is More Investment in Capital