Question

Which type of public expenditure is most likely to have a direct and immediate impact on a country's long-term productive capacity?

• A. Increased spending on social welfare programs, such as unemployment benefits.
• B. Higher government expenditure on defense and military equipment.
• C. A significant increase in salaries for public sector employees.
• D. Investment in infrastructure projects like roads and power plants.

Answer 1

Answer:

D. Investment in infrastructure projects like roads and power plants.

• Spending on infrastructure creates long-term capital assets that enhance the economy's ability to produce goods and services, directly impacting productive capacity.