In general, the greater the proportion of resources devoted to technological research in an economy, the
A)greater is current consumption.
B)closer it comes to having a comparative advantage in the production of all goods.
C)faster the production possibilities frontier shifts inward.
D)faster the production possibilities frontier shifts outward.
E)more bowed out is the shape of the production possibilities frontier.

Question

Quizplus · Accepted Answer

Investing in technological research leads to innovation and the development of new and more efficient production techniques. This results in an increase in productivity and a shift outward of the production possibilities frontier, allowing for the production of more goods and services in the long run. Therefore, the greater the proportion of resources devoted to technological research, the faster the production possibilities frontier shifts outward.

In General, the Greater the Proportion of Resources Devoted to Technological