How do governments invest in capital goods?

A.
by providing free medical care for all of their citizens

B.
by providing housing assistance for all of their citizens

C.
by giving tax breaks to companies that protect the environment

D.
by giving tax breaks to manufacturers that update their machinery

The correct answer is D - by giving tax breaks to manufacturers that update their machinery.

Governments invest in capital goods through various methods, and one of them is by providing incentives to businesses to upgrade their machinery. This is usually done through tax breaks, where the government reduces the amount of tax a manufacturer has to pay if they invest in new equipment or machinery.

By giving tax breaks to manufacturers that update their machinery, governments encourage businesses to modernize their production processes and improve efficiency. This can lead to increased productivity, economic growth, and job creation. Additionally, it helps industries adopt newer technologies and stay competitive in the global market.

To find this answer, it is important to understand the concept of capital goods and the role of government in supporting economic development. Knowledge about government policies and incentives for businesses can also be helpful in making an informed choice.