Suppose there are two economies, Alpha and Beta, which have the same production possibilities curves and are on the same point on each curve. If Beta then devotes more resources to investment goods than consumer goods when compared to Alpha, then in the future:
A) Alpha will experience greater economic growth than Beta.
B) Beta will experience greater economic growth than Alpha.
C) Alpha will not be able to achieve full employment or productive efficiency.
D) Beta will not be able to achieve full employment or productive efficiency

Question

Quizplus · Accepted Answer

By devoting more resources to investment goods, Beta is likely to experience greater economic growth in the future because investment in capital goods can lead to increased productive capacity and technological advancements.

Suppose There Are Two Economies, Alpha and Beta, Which Have