What are some factors that contribute to economic growth?

Economic growth is primarily driven by several key factors, and one of the most significant is the increase in physical and human capital, along with technological advancements.

When a country invests in physical capital—such as infrastructure, machinery, and tools—it enhances the production capacity of businesses. This means firms can produce more goods and services efficiently. Human capital, which refers to the skills and knowledge of the workforce, is equally crucial. A more educated and skilled workforce can lead to higher productivity, innovation, and adaptability to changing economic conditions.

Technological advancements play a pivotal role, as they often lead to more efficient production processes and the creation of new products and services. This can stimulate economic activity, creating jobs and increasing income levels, which in turn can contribute to higher consumer spending and investment—further driving economic growth.

In summary, a combination of increasing both physical and human capital along with continuous technological innovation creates a robust framework for sustained economic growth. This is why the correct choice highlights these elements as essential to fostering a healthy economy.