A key to economic growth and development is to:

• A. limit investment in human capital
• B. discourage technological innovation
• C. reduce the supply of goods and services
• D. increase the productive capacity of an economy

Answer: (D)

Verified step by step guidance

1. Understand the concept of economic growth and development, which refers to the increase in an economy's ability to produce goods and services over time.
2. Recognize that increasing the productive capacity of an economy means enhancing the factors that allow more output to be produced, such as labor, capital, technology, and efficiency.
3. Analyze why limiting investment in human capital, discouraging technological innovation, or reducing the supply of goods and services would negatively impact economic growth, as these actions reduce productive capacity.
4. Identify that investing in human capital (education, skills), encouraging technological innovation, and increasing the supply of goods and services are ways to increase productive capacity.
5. Conclude that the key to economic growth and development is to increase the productive capacity of an economy, which enables sustained growth and improved living standards.