Imagine an economy that produces capital goods and consumption goods. What will happen to its production possibilities curve if some of its existing capital stock wears out and is not replaced? How will your answer differ if more than enough capital is produced to replace the capital that wears out?

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The Answer of Imagine an economy that produces capital goods and consumption goods. What will happen to its production possibilities curve if some of its existing capital stock wears out and is not replaced? How will your answer differ if more than enough capital is produced to replace the capital that wears out?

Imagine an Economy That Produces Capital Goods and Consumption Goods