A significant problem with developing nations relative to their production of capital goods and consumption goods is
A)capital and consumption goods do not play a vital role in the role of determining real GDP.
B)that producing fewer capital goods invests in the future and allows for future decreases in consumption goods,but sacrifices current consumption goods which may prove beneficial to citizens in the short run.
C)that producing more capital goods invests in the future and allows for future increases in consumption goods,but sacrifices current consumption goods which may prove detrimental to citizens in the short run.
D)it is not a real problem since developing nations are not our trading partners;only the united States plays a vital role in Canadian trade policy.

Question

Quizplus · Accepted Answer

Developing nations often struggle with the decision of whether to produce more capital goods or consumption goods. While producing more capital goods may lead to future increases in consumption goods, it often requires sacrificing current consumption goods which can be detrimental in the short run. This is a significant problem for developing nations as they try to balance their present needs with their long-term goals.

A Significant Problem with Developing Nations Relative to Their Production