Which of the following is true of the production possibilities curve of an economy?
A) Along the curve, the economy produces at its potential output.
B) An increase in the stock of capital in the economy results in a downward movement along the curve.
C) An improvement in the productive skills of labor results in an upward movement along the curve.
D) A decrease in the availability of land due to a natural calamity results in a downward movement along the curve.
E) An increase in the quantity supplied of consumption goods shifts the production possibilities curve outward.
Correct Answer:
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