Question

The country of Saudi Arabia has invested heavily in improving its human capital and physical capital. Which is a likely result of this increased investment?
a. trade increases
b. standard of living goes down
c. Gross Domestic Product (GDP) rises
d. Gross Domestic Product (GDP) falls

Answer 1

c would be the correct answer it should be

Answer 2

Answer:

c. Gross Domestic Product (GDP) rises

Explanation:

Labor and physical capital are the two main resources of production in a market economy. If a country makes investments in these resources, productivity tends to increase. Consequently, more goods will be produced for consumption and export. Since the definition of GDP is the sum of all goods and services produced by an economy over a given period of time, increased productivity will lead to an increase in GDP.