Association of Chartered Certified Accountants (ACCA) Certification Practice Test

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the ACCA Certification Exam with interactive quizzes and detailed explanations. Get a head start on your success with our comprehensive study tools.

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What primarily influences sustained economic growth?

The level of government debt
The amount of new investments based on future demand expectations
The historical growth rate of the economy
The number of employed individuals

The correct answer is: The amount of new investments based on future demand expectations

Sustained economic growth is largely driven by the amount of new investments based on future demand expectations. When businesses and investors anticipate an increase in demand for goods and services, they are more likely to invest in new projects, technologies, and capacity. This investment fuels economic activity, leading to job creation, higher productivity, and ultimately, increased output and growth in the economy. Investments based on future demand expectations stimulate a positive cycle: as businesses expand and invest in new resources, they hire more employees, which boosts consumer spending as more individuals have wages to spend. This increased consumption can further raise demand for products, encouraging even more investment. Therefore, the emphasis on future demand expectations highlights the importance of confidence and foresight in business investment decisions, which are essential for fostering a growing economy over time.