2
QuizMultiple Choice

Economic Indicators

Question 2 • LA-World Geography A ? Distance Learning

What effect does investing in physical and human capital have on a country’s GDP?

Answer
A
Investing in capital increases a country’s GDP.
B
Investing in capital slightly decreases a country’s GDP.
C
Investing in capital greatly decreases a country’s GDP.
D
Investing in capital has no effect on a country’s GDP.

Explanation

Physical capital, such as machinery and buildings, helps workers produce more goods and services. Human capital, including workers’ skills and education, can also raise productivity. Higher productivity increases the country’s total output, or GDP, so the best answer is “Investing in capital increases a country’s GDP.”

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