Consider a Production Possibility Frontier [PPF] for the Current Year

question 47

Multiple Choice

Consider a production possibility frontier [PPF] for the current year that measures the output of capital goods on the horizontal axis and the output of consumer goods on the vertical axis.Which of the following statements is true?

• A)Technological progress will lead to a fall in current consumption resulting in a movement along the PPF.
• B)For the productive capacity of the economy to increase,current consumption should increase.
• C)An increase in investment in the current period will lead to a shift of the PPF in the future period.
• D)An increase in investment in the current period increases current consumption.

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