If a nation devotes a larger share of its current production to consumption goods, then
A) it must produce at a point within its PPF.
B) its PPF will shift inward.
C) its PPF will shift outward.
D) some productive factors will become unemployed.
E) its economic growth will slow down.

Question

Quizplus · Accepted Answer

Devoting a larger share of current production to consumption goods means less is being invested in capital goods, which are necessary for future production capabilities. This reduces the rate at which the economy can grow, as less is being invested in the factors that would expand productive capacity over time.

If a Nation Devotes a Larger Share of Its Current