📚 Learning Guide
Investment and Long-Run Supply
easy

Investment spending is to long-run aggregate supply as ____ is to ____.

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Learning Path
Learning Path

Question & Answer
1
Understand Question
2
Review Options
3
Learn Explanation
4
Explore Topic

Choose the Best Answer

A

Education is to workforce productivity

B

Consumption is to short-run aggregate demand

C

Government spending is to inflation

D

Taxation is to economic recession

Understanding the Answer

Let's break down why this is correct

Answer

Investment spending is important for long-run aggregate supply because it helps businesses grow and produce more goods and services over time. When companies invest in new equipment, technology, or buildings, they can make things more efficiently and increase their output. This is similar to how education improves a worker's skills, leading to more productivity. For example, if a factory buys new machines, it can produce more products faster, which boosts the overall supply in the economy. So, investment spending is to long-run aggregate supply as education is to worker productivity.

Detailed Explanation

Investment spending helps businesses grow and produce more over time. Other options are incorrect because This answer confuses short-term effects with long-term growth; This option mixes up different concepts.

Key Concepts

Investment Spending
Long-Run Aggregate Supply
Workforce Productivity
Topic

Investment and Long-Run Supply

Difficulty

easy level question

Cognitive Level

understand

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