The long run significance of investment is due to
A) its volatility
B) the importance of capital to economic growth
C) the effect of income on investment
D) the procyclical nature of investment
E) its ability to crowd-out government expenditures

Question

Quizplus · Accepted Answer

Investment is important for economic growth as it allows firms to acquire and upgrade capital goods, which in turn enables them to produce and sell more goods and services in the future. This results in increased output, employment, and incomes. Therefore, investment is a key driver of long-term economic growth and development.

The Long Run Significance of Investment Is Due to