If a country increased the production of its capital goods, then

Question

Quizplus · Accepted Answer

Increasing production of capital goods means that resources are being invested in creating machinery, equipment, and infrastructure that is needed for future production. This means that in the short run, there will be less resources available for producing consumer goods, which means less consumption today. However, in the long run, the increased production of capital goods will lead to greater efficiency and productivity, and thus higher levels of consumption in the future.

If a Country Increased the Production of Its Capital Goods