Suppose That Nepal Invests Less in New Factories and Equipment

question 101

Multiple Choice

Suppose that Nepal invests less in new factories and equipment than does the United States. This will likely cause:

• A)Nepal's production possibilities curve to shift outward faster than the U.S.'s.
• B)The U.S.'s production possibilities curve to shift inward faster than Nepal's.
• C)The U.S.'s production possibilities curve to shift outward faster than Nepal's.
• D)Nepal's production possibilities curve to shift inward faster than the U.S.'s.

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Definitions:

GDP

Gross Domestic Product, the total market value of all goods and services produced within a country in a specific time period, used as a broad measure of overall economic performance.

Personal Disposable Income

The amount of money that individuals have available for spending and saving after income taxes have been accounted for.

Manufacturing Output

The total value or volume of goods and products produced within a manufacturing sector in a specific period.

Operating Leverage

The degree to which a firm or project can increase operating income by increasing revenue, reflecting fixed versus variable costs.