A nation can achieve higher economic growth if:

• A. it restricts trade with other countries
• B. it discourages entrepreneurship and competition
• C. it reduces productivity and innovation
• D. it increases investment in physical and human capital

Answer: (D)

Verified step by step guidance

1. Understand the concept of economic growth, which refers to the increase in a nation's output of goods and services over time, often measured by the growth rate of real GDP.
2. Recognize that economic growth is driven by factors that enhance productivity, such as investment in physical capital (machines, infrastructure) and human capital (education, skills).
3. Analyze the options given: restricting trade, discouraging entrepreneurship, and reducing productivity typically hinder growth because they limit resources, innovation, and efficiency.
4. Identify that increasing investment in physical and human capital improves the productive capacity of the economy, leading to higher output and sustainable growth.
5. Conclude that among the options, the correct way for a nation to achieve higher economic growth is by increasing investment in physical and human capital, as this directly boosts productivity and innovation.