An Increase in the Production of Capital Goods

question 101

Multiple Choice

An increase in the production of capital goods

• A) must increase the current production of consumer goods.
• B) must decrease the future production of consumer goods.
• C) shifts the production possibilities frontier inward in the future.
• D) shifts the production possibilities frontier outward in the future.

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Definitions:

Price Level

A measure of the average prices of goods and services in an economy at a given time, often influencing inflation rates.

Long-run Equilibrium

A state in which economic forces such as supply and demand are balanced, occurring when the level of output is sustainable in the long term without creating inflation.

Labor Force

The total number of people available for work, including both the employed and the unemployed who are seeking employment.

Price Level

A measure of the average prices of goods and services in an economy.