Suppose That an Economy Is Initially Operating at a Point

question 205

Multiple Choice

Suppose that an economy is initially operating at a point on its PPC. If it then experiences an expansion in its production capacity, but its total spending does not rise as fast as its capacity, the
Economy will end up

• A) still on its production possibilities curve.
• B) outside its production possibilities curve.
• C) inside its production possibilities curve.
• D) on one of the axes of its production possibilities curve.

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Definitions:

Freudian Stage

A phase in Sigmund Freud's theory of psychosexual development, where each stage is associated with a particular conflict that must be resolved for healthy psychological development.

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Stages in Freud's theory during which, according to Freud, the pleasure-seeking energies of the id focus on distinct erogenous zones.

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