What is one consequence of capital accumulation?

Capital accumulation refers to the process in which an economy increases its stock of capital assets, such as machinery, tools, and buildings. This accumulation leads to more resources available for production purposes, which enhances the overall production capacity of the economy. As businesses invest in capital, they can produce goods and services more efficiently and at a larger scale, enabling expansion and potentially leading to economic growth.

When there is an increase in production capacity, it often correlates with improvements in productivity. With better or more advanced equipment and facilities, companies can increase output, create more jobs, and possibly lower the costs of goods and services for consumers. Thus, one of the main consequences of capital accumulation is indeed increased production capacity in the economy. This process is crucial for economic development, as it allows for innovation and the ability to meet the demands of a growing market.