Question:

Why do peaple suggest that Uneeds to devote more resources to investment goods? ?

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Why not product just consumption goods?

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  1. Because then we are not contributing to the economy's capital stock.

    If we produce only things that are directly consumed, then we are not putting anything into manufactured aids to production, such as tools, equipment, and factory buildings (these things are collectively called the capital stock).  That means that a) we are not expanding our production capacity, which would allow us to produce goods at a faster rate, and b) we are unable to replace factories and equipment as they get too old.

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