Which of the following best describes a factor that limits economic growth?

• A. Insufficient capital investment
• B. Abundant natural resources
• C. Technological advancement
• D. High levels of skilled labor

Answer: (A)

Verified step by step guidance

1. Step 1: Understand the concept of economic growth, which refers to the increase in the production of goods and services in an economy over time, often measured by the growth rate of real GDP.
2. Step 2: Identify the key factors that contribute to economic growth, such as capital investment, natural resources, technological advancement, and skilled labor.
3. Step 3: Recognize that factors which limit economic growth are those that restrict the economy's ability to increase output, such as insufficient capital investment, which means not enough resources are allocated to acquiring machinery, infrastructure, or tools needed for production.
4. Step 4: Compare the options given: abundant natural resources, technological advancement, and high levels of skilled labor are generally positive contributors to growth, not limitations.
5. Step 5: Conclude that among the options, 'insufficient capital investment' best describes a factor that limits economic growth because without adequate capital, production capacity cannot expand effectively.