An increase in capital stock
A) enhances labor productivity.
B) provides valuable services directly.
C) causes economic growth.
D) all of the above

Question

Quizplus · Accepted Answer

A higher capital stock can enhance labor productivity by providing workers with better tools and equipment to work with. Additionally, an increase in capital stock can provide valuable services directly, such as when a business purchases new machinery to improve production. Finally, capital stock is a key driver of economic growth, as it allows businesses to produce more output and generate greater profits, which can then be reinvested in the economy.

An Increase in Capital Stock