Answered step by step
Verified Expert Solution
Question
1 Approved Answer
If an economy increases it savings and invests in capital goods today, what will happen, if anything, to its future PPF ? a ) Nothing,
If an economy increases it savings and invests in capital goods today, what will happen, if anything, to its future PPF
a Nothing, since this would be a movement along the PPF from a point that has mostly consumption goods and few capital goods to another point on the PPF that has fewer consumption goods and more capital goods.
b The curve would shift inward because more savings would mean less spending and less incentive for firs to produce consumption goods in the future.
c Nothing, since resources are limited the PPF is fixed in place.
d The curve would shift outward because increased capital goods will make it possible to produce more consumption goods in the future.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started