A nation's production possibilities curve should,ceteris paribus,shift

Question

Quizplus · Accepted Answer

A positive net investment indicates an increase in productivity and the ability to produce more goods and services, shifting the production possibilities curve outward. Option A is incorrect because depreciation refers to the decrease in value of fixed assets over time and does not directly impact the production possibilities curve. Option B is incorrect because net investment being zero means there is no change in the amount of capital stock and, therefore, no shift in the production possibilities curve. Option D is incorrect because gross investment refers to the total investment in an economy, including replacement of depreciated capital, and does not necessarily indicate an increase in productivity.

A Nation's Production Possibilities Curve Should,ceteris Paribus,shift