Which of the following statements is true?

Question

Quizplus · Accepted Answer

The production possibilities curve shows the maximum amount of goods and services that an economy can produce given its resources and technology. This limits the potential real income of the economy because it cannot produce beyond this point. Therefore, statement A is true.

B, C, and D are incorrect because consumption does not necessarily equal investment, market incomes do not necessarily equal business expenditures, and not every dollar spent on goods and services becomes income for the government.

Which of the Following Statements Is True