Economic growth is most likely to result in which effect for a business?A.A decrease in total productivityB.An increase in total productivityC.A decrease in capital investmentD.An increase in capital investment
Question
Economic growth is most likely to result in which effect for a business?A.A decrease in total productivityB.An increase in total productivityC.A decrease in capital investmentD.An increase in capital investment
Solution
Economic growth is most likely to result in an increase in total productivity and an increase in capital investment for a business. Here's why:
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Increase in Total Productivity: Economic growth often leads to an increase in demand for products and services. As businesses strive to meet this increased demand, they tend to increase their productivity. This could mean producing more goods or offering more services within the same amount of time.
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Increase in Capital Investment: Economic growth often results in increased profits for businesses. With more money at their disposal, businesses are more likely to invest in new technologies, equipment, or infrastructure to further increase their productivity or expand their operations. This is known as capital investment.
So, the answer is both B. An increase in total productivity and D. An increase in capital investment.
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