-Assume that the production possibilities curves in the diagram above are those of a closed economy.If the economy can currently produce those combinations of capital and consumption goods shown on production possibilities curve A,then it is _________ likely that the economy will be able to achieve those combinations of capital and consumption goods on the production possibilities curve B if the economy is currently producing that combination represented by point ________.

Question

Quizplus · Accepted Answer

If the economy is currently producing at point Z on curve A, it is more likely to achieve combinations on curve B because point Z represents a higher level of capital goods, which can lead to more future growth and the ability to reach curve B.

-Assume That the Production Possibilities Curves in the Diagram Above