Answer to Question #80869 in Microeconomics for Mariah Hill

Question

Suppose a company makes an investment and opens another factory. In one or two sentences, explain how this investment directly creates jobs.

Answer 1

A new business needs new workers. This leads to the creation of new jobs. But the new company buys materials at other enterprises. It also leads to the creation of jobs for supplying materials at old enterprises. One also needs to deliver these products to a new company. For this, the transport company will also create new jobs.
Consequently, new investments create new jobs as in the new enterprise as in the old enterprises.