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-(Figure: Consumer and Capital Goods)Use Figure: Consumer and Capital Goods.The movement from curve 1 to curve 2 indicates a(n):
A)growing ability of the economy to produce capital and consumer goods.
B)increase in the stock market.
C)decrease in the factors of production.
D)shift of the production possibility frontier toward producing fewer goods.

Question

Use the following to answer question:

-(Figure: Consumer and Capital Goods)Use Figure: Consumer and Capital Goods.The movement from curve 1 to curve 2 indicates a(n):
A)growing ability of the economy to produce capital and consumer goods. 
B)increase in the stock market. 
C)decrease in the factors of production. 
D)shift of the production possibility frontier toward producing fewer goods.

Quizplus · Accepted Answer

The movement from curve 1 to curve 2 indicates an increase in the ability of the economy to produce both capital and consumer goods, suggesting that the economy has become more efficient and has increased its potential output.

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