An increase in the nation's capital stock will
A) shift the PPF outward.
B) cause a movement along the PPF upward and leftward.
C) cause a movement along the PPF downward and rightward.
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, which shifts the Production Possibility Frontier (PPF) outward, indicating that the nation can now produce more of both goods than before.

An Increase in the Nation's Capital Stock Will