A nation that devotes more of its resources to the production of capital goods is likely to:
A) Cause its production possibilities curve to shift outward
B) Cause its production possibilities curve to shift inward
C) Increase the slope of its production possibilities curve
D) Decrease the slope of its production possibilities curve

Question

Quizplus · Accepted Answer

Devoting more resources to the production of capital goods means that the economy is investing in the production of machinery, equipment, and infrastructure which can increase the economy's capacity to produce goods and services. This, in turn, can shift the production possibilities curve outward as the economy becomes more efficient in producing both capital goods and consumer goods.

A Nation That Devotes More of Its Resources to the Production