Assume that a change in government policy results in greater production of both consumer goods and investment goods. We can conclude that
A) the economy was not employing all of its resources before the policy change.
B) the economy's production possibilities curve has been shifted to the left as a result of the policy decision.
C) this economy's production possibilities curve is convex (bowed inward) to the origin.
D) the law of increasing opportunity costs does not apply in this society.

Question

Quizplus · Accepted Answer

If both consumer goods and investment goods production increases, it suggests that the economy was not operating at full employment of its resources before the change in the government policy. Increases in the production of both types of goods indicate that there are unused resources that can be utilized to produce more goods without sacrificing the production of others.

Assume That a Change in Government Policy Results in Greater