Question

How might you, as a consumer, a member of our economy, contribute to productive capital formation? Bonus: 5pts

Answer 1

Ans: The capital formation is nothing but addition of capital goods that will be used for the further production of consumer goods and provides the velocity to the economy, and we as a customers are those reckoning forces that allow a businessman to acquire more of capital goods so that they can produce more of consumer goods and thus they will grow, thus economy of the country as a whole will grow. So as a consumer we play a catalyst role for productive capital formation. SO if there is no consumer then there is no need for capital formation.