Question
Which of the following statements best explains why a nation's consumption possibilities line lies outside of its production possibilities line?. a. International trade requires nations
Which of the following statements best explains why a nation's consumption possibilities line lies outside of its production possibilities line?.
a. International trade requires nations to give up more than they receive, adversely affecting production and causing the production possibilities curve to shift inward away from the production possibilities curve.
b. If nations specialize in and export goods for which they have a comparative advantage and import goods for which they have a comparative disadvantage, more goods can be obtained through domestic production and trade than from domestic production alone.
c. The consumption possibilities line lies outside the production possibilities line because consumers are able to borrow and spend more than their domestically earned income.
d. In order for the consumption possibilities line to lie outside of the production possibilities line, a nation must always export more than it imports.
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