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

Devoting more resources to investment goods indicates that Beta is focusing on increasing its productive capacity and improving its technology. This will lead to greater economic growth in the future as Beta will be able to produce more in the long run. Therefore, the correct choice is Option B. Option A is incorrect because Alpha is not making changes to increase its productive capacity, so it will not experience greater economic growth than Beta. Option C and D are incorrect because there is no indication that either Alpha or Beta will not be able to achieve full employment or productive efficiency.

Suppose There Are Two Economies,Alpha and Beta,which Have the Same