-Assume That the Production Possibilities Curves in the Diagram Above

question 108

Multiple Choice

-Assume that the production possibilities curves in the diagram above are those of a closed economy.If the economy can currently produce those combinations of capital and consumption goods shown on production possibilities curve A,then it is _________ likely that the economy will be able to achieve those combinations of capital and consumption goods on the production possibilities curve B if the economy is currently producing that combination represented by point ________.

• A) more;W
• B) more;Z
• C) not;Z
• D) less;Z
• E) not;W

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Definitions:

Capital

Financial assets or the financial value of assets, such as cash or goods, used to generate income or wealth.

Internal Rate

A financial metric, often referred to as the internal rate of return (IRR), that calculates the profitability of potential investments.

Return

Total monetary flow of an asset as a fraction of its price.

Investment

The action or process of allocating resources, usually money, with the expectation of generating an income or profit.