An economy's production possibilities are most likely to expand if

Question

Quizplus · Accepted Answer

Gross investment represents the total amount of investment in an economy, while depreciation represents the amount of capital that is consumed or worn out. Therefore, if gross investment is greater than depreciation, the economy is increasing its stock of capital, which will lead to an increase in production possibilities. Options A, B, and D all involve a decrease in the stock of capital, which would limit production possibilities.

An Economy's Production Possibilities Are Most Likely to Expand If