Question

Which of the following are the effects of entrepreneurs' participation in capital formation?

• A. Creation of employment opportunities
• B. Increase in national income
• C. Decrease in Gross Domestic Product
• D. Creation of unemployment

Answer 1

Answer: (A), (B)

Increase in national income

Entrepreneurs utilise idle resources and help in capital formation. When they set up businesses, they create employment opportunities, thereby increasing the income of the people. This, in turn, contributes to the increased national income in the economy.