Country X and Country Y are both efficient in production. Country X devotes one third of its resources to accumulating capital and the other three fourth to consumption. Country Y devotes one fourth of its resources to accumulating capital and two thirds to consumption. Which country will grow faster? In which country the opportunity cost of economic growth is higher? Explain.

Question

Quizplus · Accepted Answer

The Answer of Country X and Country Y are both efficient in production. Country X devotes one third of its resources to accumulating capital and the other three fourth to consumption. Country Y devotes one fourth of its resources to accumulating capital and two thirds to consumption. Which country will grow faster? In which country the opportunity cost of economic growth is higher? Explain.

Country X and Country Y Are Both Efficient in Production