The leader of a federal political party made the following campaign promise: "My administration will increase national defense without requiring sacrifices elsewhere in the economy." The promise can be kept if:

Question

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The promise can be kept if the economy either utilizes its existing resources more efficiently, moving from a point inside the production possibilities curve to a point on the curve (B), or if there is an outward shift in the production possibilities frontier due to technological improvements or other factors that increase the economy's capacity (C). Both scenarios allow for increased defense spending without sacrificing other areas of the economy, unlike moving along the curve (A) which would require trade-offs.

The Leader of a Federal Political Party Made the Following