The Production Possibilities Curve Tells Us That If Full Employment

question 50

Multiple Choice

The production possibilities curve tells us that if full employment exists and a nation wishes to permanently increase its production of military goods,it must

• A)also increase its production of nonmilitary goods.
• B)reduce its output of nonmilitary goods.
• C)suffer inflation.
• D)suffer unemployment.

---

Definitions:

Increase

An upward change or growth in value, quantity, or size.

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded at those prices, typically downward sloping.

Demand

The quantity of a good or service that consumers are willing and able to purchase at various prices during a specified period.

Shifts

Refers to changes in the position of demand or supply curves in economic models, often due to changes in external factors such as technology, preferences, or policy.