An analysis of production possibilities curves indicates that the reason why underdeveloped nations have difficulties increasing their economic growth rates is because:

Question

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Underdeveloped nations typically have low levels of capital, which limits their ability to produce more goods and services. To increase economic growth, they need to invest in more capital goods, such as factories and machinery. However, this requires cutting back on consumption levels, which can be difficult for people who already have low levels of income and few basic necessities. This means that underdeveloped nations may need to sacrifice short-term consumption in order to achieve long-term economic growth. This trade-off is illustrated by the production possibilities curve, which shows that producing more capital goods (and thus increasing growth) requires sacrificing the production of consumer goods.

An Analysis of Production Possibilities Curves Indicates That the Reason