An increase in the amount spent on new factories and equipment would cause the production possibilities curve to
A) become steeper.
B) shift away from the origin.
C) become flatter.
D) shift towards the origin.
E) change in an unpredictable way.

Question

Quizplus · Accepted Answer

An increase in the amount spent on new factories and equipment would shift the production possibilities curve away from the origin because it would allow the economy to produce more of both goods.

An Increase in the Amount Spent on New Factories and Equipment