When more resources in an economy are devoted to the production of capital goods, what happens to the production possibilities curve?

Question

Quizplus · Accepted Answer

When more resources are devoted to the production of capital goods, it leads to an increase in productivity and efficiency, which results in an outward shift of the production possibilities curve in the future. This shift indicates an increase in the potential output levels of both consumer goods and capital goods. Therefore, the best choice is D.

When More Resources in an Economy Are Devoted to the Production