Which aspect of business growth is associated with a larger asset base?

Prepare for the SACE Stage 2 Economics exam with a comprehensive quiz. Study through flashcards and multiple-choice questions, each featuring hints and explanations for thorough understanding. Get ready for your exam!

The correct choice reflects the relationship between an expanding asset base and business growth. As a business grows, it typically invests in more assets, such as equipment, real estate, and technology, which can generate greater production capacity and efficiencies. When a business develops a larger asset base, it often leads to increased revenues and, consequently, higher profits. This is because a more extensive asset base can support more significant operations and deliver more goods or services to customers, thereby improving overall financial performance.

Additionally, businesses that are thriving and accumulating assets can afford to provide higher salaries or bonuses to employees, which can enhance employee morale and productivity further. This connection highlights the importance of assets in creating a successful business environment where profit and compensation can grow.

In contrast, the other options do not accurately capture the relationship between asset accumulation and business growth; they focus on aspects that do not necessarily correlate with a larger asset base.

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