In Figure 9.5,a movement from Point A to Point B would result from
A)A decrease in wage costs.
B)An increase in the interest rate.
C)An increase in disposable income.
D)An improvement in expectations for future sales.

Question

In Figure 9.5,a movement from Point A to Point B would result from
A)A decrease in wage costs. 
B)An increase in the interest rate. 
C)An increase in disposable income. 
D)An improvement in expectations for future sales.

Quizplus · Accepted Answer

An improvement in expectations for future sales would likely increase the demand for investment goods, causing a movement from Point A to Point B on the production possibilities frontier. Choices A, B, and C would not directly affect the production possibilities frontier.