Question
How can a country increase its GDP over time?
A. A country can increase its GDP by expanding its productive capacity through investment in infrastructure, machinery, education, healthcare and technological innovation.
Strong institutions, efficient regulation and international trade can encourage business formation, investment and productivity growth. Consumer spending, government expenditure and lower interest rates can stimulate demand in the short term, particularly when resources are underutilised. However, sustainable long term growth depends primarily on increasing labour, capital and productivity rather than consumption alone.