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-Refer to Figure 9-12

Question 131

Multiple Choice

  -Refer to Figure 9-12.Assume that a nation can slow its population growth rate so that it now requires only N' worth of investment in capital to maintain current capital per worker.If the nation adopts such a policy but maintains investment in capital at N,what would be the likely effect? A)  Economic growth will slow because the nation would not be producing the optimal amount of capital;it would be over-investing. B)  The nation would produce inside the production possibilities frontier;that is,there will be inefficiencies in production. C)  The production possibilities frontier would shift inward because of the decrease in population. D)  The production possibilities frontier would shift outward at the same rate as it would have in the absence of the policy,but the mix of capital and consumer goods produced would change. E)  The production possibilities frontier would shift outward more than it would have in the absence of the policy.
-Refer to Figure 9-12.Assume that a nation can slow its population growth rate so that it now requires only N' worth of investment in capital to maintain current capital per worker.If the nation adopts such a policy but maintains investment in capital at N,what would be the likely effect?


A) Economic growth will slow because the nation would not be producing the optimal amount of capital;it would be over-investing.
B) The nation would produce inside the production possibilities frontier;that is,there will be inefficiencies in production.
C) The production possibilities frontier would shift inward because of the decrease in population.
D) The production possibilities frontier would shift outward at the same rate as it would have in the absence of the policy,but the mix of capital and consumer goods produced would change.
E) The production possibilities frontier would shift outward more than it would have in the absence of the policy.

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