The diagram below shows alternate paths for two hypothetical economies,each starting with GDP of $1 billion.Assume that Area 1 is equal to Area 2.
FIGURE 25-1 Refer to Figure 25-1.The area marked Area 1 represents
A) the value of consumption from Year 0 to Year X in Economy A.
B) the value of the investment in capital goods undertaken by Economy B.
C) the value of the investment in capital goods undertaken by Economy A.
D) the sacrifice of current consumption by Economy B,as compared to Economy A.
E) the sacrifice of current consumption by Economy A,as compared to Economy B.
Correct Answer:
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