When More Resources in an Economy Are Devoted to the Production

question 57

Multiple Choice

When more resources in an economy are devoted to the production of capital goods, what happens to the production possibilities curve?

• A) The production possibilities curve is unchanged from period to period.
• B) The production possibilities curve in the current period shifts inward, but shifts outward in the future.
• C) The production possibilities curve shifts inward.
• D) The production possibilities curve shifts outward in the future.

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Definitions:

Reversal Effect

A phenomenon in finance where the performance of stocks or markets reverses direction after a period of significant movement.

Market Trading Data

Information and statistics related to the trading activity in financial markets, including volume, price, and movements of securities.

EMH

Efficient Market Hypothesis, a theory that suggests that financial markets are fully efficient in reflecting information in asset prices.

Charting

The practice of using graphs and charts to analyze historical data and patterns to forecast the future movement of securities.