If an Economy Keeps Increasing Its Capital Stock, Then Over

question 91

Multiple Choice

If an economy keeps increasing its capital stock, then over time its production possibilities curve will:

• A) not move.
• B) shift to the left.
• C) shift to the right.
• D) disappear because scarcity ceases to exist.

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Definitions:

Accumulated Expenditures

The total amount of expenses incurred over time for a specific purpose, such as the construction of an asset.

GAAP

Stands for Generally Accepted Accounting Principles, which are a common set of accounting principles, standards, and procedures that companies use to compile their financial statements.

Routine Maintenance

Regular, scheduled work done on equipment, machines, or systems to prevent unexpected breakdowns and to keep them operating efficiently.

Capitalized

The process of recording a cost or expense on the balance sheet for the purposes of spreading out the expense over the useful life of an asset, rather than charging it to expense all at once.