Opportunity Cost in Economic Growth

Steps:

• Define opportunity cost as the value of the next best alternative forgone when making a choice.
• In economic growth, resources allocated to investment (e.g., capital goods) cannot be used for current consumption.
• Evaluate choices: Identify which reflects a trade-off between growth and immediate benefits.
• Select the option showing reduced consumption to enable future growth.

Why D is correct:

• Opportunity cost of growth is the consumption sacrificed for investment, per the production possibilities frontier, where shifting toward capital goods reduces current output.

Why the others are wrong:

• A: Sectoral shifts like services growing faster are structural changes, not a cost of growth.
• B: Increased imports support growth but represent a balance-of-payments effect, not an opportunity cost.
• C: Greater government intervention is a policy response, not an inherent trade-off of growth.

Final answer: D