An increase in the nation's capital stock will
A) shift the PPF outward.
B) cause a movement along the PPF up and to the left.
C) cause a movement along the PPF down and to the right.
D) move the nation from producing within the PPF to producing at a point closer to the PPF.

Question

Quizplus · Accepted Answer

An increase in the nation's capital stock increases its productive capacity, allowing it to produce more goods and services. This is represented by an outward shift of the Production Possibility Frontier (PPF), indicating that the economy can now achieve higher levels of production for both goods.

An Increase in the Nation's Capital Stock Will