In general,if country A is accumulating capital at a faster rate than country B,then country A
A)will soon have a comparative advantage in the production of most goods.
B)is using a larger proportion of resources to produce consumption goods.
C)will have a production possibilities frontier that is shifting outward faster than country B's.
D)will have a higher rate of inflation than country B.
E)will have more unemployment than country B.

Question

Quizplus · Accepted Answer

Accumulating capital allows a country to improve its technology, increase its productivity, and expand its production possibilities frontier (PPF). A faster rate of capital accumulation means that country A's PPF is shifting outward faster than country B's PPF, giving country A a greater potential for producing more goods and services. Therefore, choice C is the most accurate option. Choices A, B, D, and E are incorrect because they either do not necessarily follow from faster capital accumulation or are unrelated to it.

In General,if Country a Is Accumulating Capital at a Faster