Explanation
Option A is correct: Increasing business investment most likely results in the largest increase in per capita output.
Economic reasoning:
With fixed labor supply:
- Per capita output = Total output ÷ Number of workers
- To increase per capita output, you need to increase productivity
- Business investment in capital goods, technology, and equipment directly boosts labor productivity
Why business investment is most effective:
- Directly increases capital per worker
- Enhances technology and production efficiency
- Creates economies of scale
- Drives innovation and productivity gains
Foreign investment (Option B):
- While beneficial, its impact is more indirect
- May focus on specific sectors rather than economy-wide productivity
- Benefits depend on how capital is allocated
Key concept: In developed economies with stable labor forces, productivity growth through capital investment is the primary driver of per capita output growth.