4. The blue (inner) curve on the following graph shows the current production possibilities curve (PPC) for the economy of Econoland, and the green (outer) curve shows the PPC for Econoland next year if the economy were to operate at point B today. That is, investment choices today impact the growth of the economy, and thus the PPC for next year.

A CONSUMPTION GOODS B PPC Next Year C PPC Today CAPITAL GOODSPPC Next Year PPC Today CONSUMPTION GOODS PPC. PPC, CAPITAL GOODSProduct Markets Businesses Households Factor MarketsMarkets for Goods and Services Firms Households Markets for Factors of Production32 28 PPC 24 FO 20 B DRINKING WATER (Millions of litres) 12 100 200 300 400 500 600 700 800 COAL (Millions of tonnes)