Final answer:
The best way to improve the GDP of Piperistan is by investing in capital goods and infrastructure. This approach enhances productivity and fosters economic growth, contributing positively to GDP.
Step-by-step explanation:
To improve the GDP of Piperistan, the best option from the choices provided would be to invest in capital goods and infrastructure.
This investment is a known strategy to enhance productivity, foster economic growth, and thus lead to an increase in GDP. It is the foundation of productivity improvements that lead to economic growth, primarily through the interaction of physical capital, technology, and human capital in a market-driven economy.
An embargo, such as putting an embargo on the United States, tends to have a negative impact on trade and is associated with a loss to consumers and a potential decrease in GDP as a country can only consume what it produces.
Lowering the price of all goods in the market can potentially lead to lower revenues and profits, which may not favorably impact GDP. Lastly, cutting spending on human capital is likely to be detrimental, as human capital deepening is a significant driver of productivity and economic growth.
Therefore, to foster economic expansion and amplify job creation, Piperistan should emphasize policies that invest in human capital, technological advances, and physical capital. These are the key elements leading to a more educated workforce, innovation, and higher productivity, which are essential for shifting aggregate supply curves to the right, thereby enhancing GDP.
Therefore, C) Invest in capital goods and infrastructure is correct.