Before the First Gulf War,Kuwait Had the Capacity to Produce

question 208

Essay

Before the first Gulf War,Kuwait had the capacity to produce a certain amount of oil from its oil wells.After the war,it found that capacity greatly diminished because the oil wells were on fire.Draw Kuwait's PPF before and after the war,assuming that the only two goods produced are oil and food.Further assume that setting the oil wells on fire did not affect Kuwait's ability to produce food.Explain why the PPF before the war is different from the PPF after the war.

---

Definitions:

National Income Accountants

Economists who calculate the nation's total income, including GDP and GNP.

GDP

The Gross Domestic Product serves as a gauge for a country's economic output, encapsulating the aggregate value of goods and services generated within a set period.

Globalization

The process by which businesses or other organizations develop international influence or start operating on an international scale, leading to increased interconnectedness of the world's economies.

Free Traders

Individuals or entities advocating for minimal restrictions on international trade, believing it enhances economic efficiency and benefits all countries involved.