Reallocating resources from consumer goods to capital goods can lead to increased productivity and long-term economic growth by enhancing ____, which is crucial for sustainable economic development.

Reallocating resources from consumer goods to capital goods can enhance productive capacity, which is essential for long-term economic growth. Capital goods, like machinery and buildings, help businesses produce more efficiently and effectively. For instance, if a factory invests in new equipment rather than just producing more toys, it can manufacture goods faster and with better quality. This increased productivity means that the economy can produce more over time, leading to higher overall output and growth. Ultimately, focusing on capital goods supports sustainable economic development by ensuring that the economy can meet future demands while improving living standards.