Which of the following would most likely lead to economic growth, as discussed in the article?

• A. A decrease in technological innovation
• B. An increase in investment in physical capital
• C. A reduction in the labor force participation rate
• D. Higher levels of government consumption spending

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the concept of economic growth, which refers to an 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: Recognize the main drivers of economic growth, which typically include technological innovation, increases in physical capital (such as machinery and infrastructure), improvements in human capital (education and skills), and labor force growth.
3. Step 3: Analyze each option in terms of its impact on these drivers: a decrease in technological innovation would slow growth; a reduction in labor force participation reduces available workers; higher government consumption spending does not directly increase productive capacity.
4. Step 4: Focus on the option 'an increase in investment in physical capital,' which means more resources are devoted to machinery, tools, and infrastructure that enhance productive capacity, thereby promoting economic growth.
5. Step 5: Conclude that among the options, increasing investment in physical capital is most likely to lead to economic growth because it directly raises the economy's ability to produce more goods and services.