Suppose that the government could stimulate spending in one of the following expenditure categories. In which category would the spending increase contribute most to an expansion of the country's production possibilities frontier?

Question

Quizplus · Accepted Answer

Increasing spending on capital goods would most contribute to expanding the production possibilities frontier because capital goods enhance the productive capacity of an economy, leading to greater potential output in the future.

Suppose That the Government Could Stimulate Spending in One of the Following