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The graph below shows the short-run production possibilities frontier for a hypothetical country whose currency is the U.S. dollar (as it is, in fact, for

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The graph below shows the short-run production possibilities frontier for a hypothetical country whose currency is the U.S. dollar (as it is, in fact, for Ecuador and El Salvador). The country chooses to produce the mix of capital and consumer goods indicated by point A. This leads to a long-run expansion of the production possibilities frontier. with a 20% increase in production capacity for both consumer and capital goods. Use the curved-line tool to draw the new production possibilities frontier. PointA happens to coincide with the middle control point of the short-term curve; use that to help you decide where the curved-line tool's middle control point of the long-term curve should go (do not use the point tool to plot a point). To refer to the graphing tutorial for this question type. please click here

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