As a general rule, an increase in the capital available to a society
A)reduces the slope of the production possibilities frontier, making it shallower.
B)increases the slope of the production possibilities frontier, making it steeper.
C)shifts the production possibilities frontier outward, away from the origin.
D)shifts the production possibilities frontier inward, toward the origin.
E)makes the production possibilities frontier more bowed out.

Question

Quizplus · Accepted Answer

An increase in capital available to a society means that there are more resources available to produce goods and services. As a result, the production possibilities frontier (PPF) is able to shift outward, meaning that society is able to produce more of both goods and services. This is because an increase in capital leads to an increase in productivity, allowing for more efficient use of resources and a larger output.

As a General Rule, an Increase in the Capital Available