If a Country Must Decrease Current Consumption to Increase the Amount

question 382

Multiple Choice

If a country must decrease current consumption to increase the amount of capital goods it produces today, then it must

• A) be using resources inefficiently today, but will be more efficient in the future.
• B) be producing along the production possibilities frontier today and its production possibilities frontier will shift outward if it produces more capital goods.
• C) must be producing outside the production possibilities frontier and will continue to do so in the future.
• D) must not have private ownership of property and will have to follow planning authorities' decisions today and in the future.

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Definitions:

Low-Income DVCs

Developing or underdeveloped countries with low levels of average income per capita, often facing significant economic and social challenges.

G8 Nations

A group of eight major industrialized countries that meet periodically to address global economic issues; originally included Canada, France, Germany, Italy, Japan, Russia, the United Kingdom, and the United States.

Debt Cancellation

The action of forgiving or eliminating all or part of a debt, making the borrower free from repaying the amount owed.

Economic Dependence

A situation where the economic conditions and performance of one country or region are heavily influenced by another.