Use the following to answer questions .
Exhibit: Investment and Production Possibilities
-(Exhibit: Investment and Production Possibilities) Suppose the economy is operating at point m on curve A. The decision to move to point p
I. requires a sacrifice of current consumption.
II. requires a sacrifice of future consumption.
III. adds to the economy's capital stock assuming depreciation remains at a level corresponding to point m.
IV. enables the economy to increase both its consumption and investment in the future.

Question

Use the following to answer questions .
Exhibit: Investment and Production Possibilities 
-(Exhibit: Investment and Production Possibilities) Suppose the economy is operating at point m on curve A. The decision to move to point p
I. requires a sacrifice of current consumption.
II. requires a sacrifice of future consumption.
III. adds to the economy's capital stock assuming depreciation remains at a level corresponding to point m.
IV. enables the economy to increase both its consumption and investment in the future.

Quizplus · Accepted Answer

Moving to point p on curve A requires a sacrifice of current consumption (I), adds to the economy's capital stock assuming depreciation remains at a level corresponding to point m (III), and enables the economy to increase both its consumption and investment in the future (IV). It does not necessarily require a sacrifice of future consumption (II), as it depends on the economy's ability to produce and invest efficiently at point p.

Use the Following to Answer Questions