Final answer:
An increase in physical capital usually leads to higher productivity and contributes to economic growth by expanding the potential GDP of a country.
Step-by-step explanation:
An increase in physical capital, such as the amount and quality of machinery and equipment that employees are able to work with, is expected to lead to an increase in productivity. Physical capital refers not just to tangible assets like factories, machinery, and infrastructure, but also to technological advancements that can enhance the productivity of workers. When employees have access to more efficient and higher quantity of tools, or when the quality of their equipment is improved, they can produce goods and services more efficiently and effectively. Moreover, investing in physical capital contributes to economic growth as it is one of the key factors in increasing the potential GDP of a country.