China's State Council Has Encouraged More Spending to "Improve Transportation

question 47

Multiple Choice

China's State Council has encouraged more spending to "improve transportation links and other infrastructure...." It will also "step up its spending on vocational training and other educational programs for adults." www.nytimes.com, Keith Bradsher, October 19, 2008
Suppose that capital goods are on the vertical axis while consumption goods are on the horizontal axis of China's PPF. As a result of enacting the policies, we would expect
I. an expansion of China's production possibilities.
II. capital accumulation.
III. an increase in human capital.

• A) i and II only.
• B) i, II and III.
• C) i and III only.
• D) II and III only.

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Definitions:

Convenience

The state of being able to proceed with something with little effort or difficulty, often enhancing user experience.

Specialty

Goods or services that are distinguished by a specific feature, quality, or characteristic, catering to a niche market.

Unsought Product

Goods or services that consumers do not normally think of buying or do not know exist until they are needed.

Cemetery Plot

A piece of land in a cemetery owned by an individual or family for the purpose of burying deceased members.