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Exploring Economics

8th Edition
Robert L. Sexton
Publisher: SAGE Publications, Inc
ISBN: 9781544336329

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BuyFindarrow_forward

Exploring Economics

8th Edition
Robert L. Sexton
Publisher: SAGE Publications, Inc
ISBN: 9781544336329
Chapter 20, Problem 8P
Textbook Problem
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Would a shift from investment in capital goods to investment in education increase or decrease the growth rate of real GDP per capita?

To determine

To explain:

Whether there will be increase or decrease the real GDP if there is shift from investment in capital goods to investment in education.

Explanation of Solution

Capital goods are basically the goods that are used for producing other goods and services and are not treated as finished goods.

If the investment in education increases, then the real GDP would increase as education will help in providing the skill sets. GDP directly revolves around labor productivity and human capital investment...

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