Question
Suppose Country A produces few consumption goods and many investment goods, whereas Country B produces few investment goods and many consumption goods. Other things being
Suppose Country A produces few consumption goods and many investment goods, whereas Country B produces few investment goods and many consumption goods. Other things being equal, what would you expect to happen?
a. Per capita income will grow more rapidly in Country B.b. Population will grow faster in Country B.c. The production possibilities curve for Country A will shift out more rapidly than that of Country B.d. Assuming that both countries started with identical production possibilities curves, in 20 years people in Country B will be able to produce more consumer goods than people in Country A.
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