State whether the following statements are true or false. 5. Money increases productivity of capital.

State whether the following statements are true or false.
5. Money increases productivity of capital.
Answer: The above statement is correct. Money increases productivity of capital. In the sense, with money, more capital can be raised. Since increased capital implies purchase of better machinaries that produce superior quality products in less time, it leads to an increase in output and thereby increases productivity of the capital.

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