Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Increase in economic growth due to enhanced productivity
B
Immediate increase in consumer satisfaction
C
Decrease in overall GDP in the short run
D
Higher unemployment rates in the consumer goods sector
Understanding the Answer
Let's break down why this is correct
Answer
When a country decides to shift its resources from making consumer goods, like clothes and food, to producing capital goods, such as machinery and buildings, it is focusing on future growth. Capital goods help businesses operate more efficiently and increase production over time. For example, if a factory invests in new machines, it can produce more products faster, leading to more sales and profits. In the long run, this investment can boost the economy by creating more jobs and increasing overall wealth. Therefore, while immediate consumer goods may be fewer, the country is likely to experience stronger economic growth and improved living standards in the future.
Detailed Explanation
When a country focuses on making capital goods, it builds things like factories and machines. Other options are incorrect because Some might think that shifting resources will quickly make people happier; It's a common idea that changing resources will hurt the economy right away.
Key Concepts
Economic Growth
Resource Allocation
Capital Formation
Topic
Economic Growth and Resource Allocation
Difficulty
medium level question
Cognitive Level
understand
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