A devastating war that kills people and destroys buildings will:
A: shift the PPF outward
B: shift the PPF inward
C: move the economy from one point to another along the PPF
D: move the economy to a point beyond the PPF
E: move the economy to a point inside the PPF
Answer: B: shift the PPF inward
FEEDBACK:
War destroys resources (such as labor and capital), which would decrease the production possibilities of this economy and shift the entire curve inward.
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Human capital is:
A) the set of acquired skills and abilities that workers bring to the production of goods and services. B) the financial wealth the economy has available to produce goods and services. C) the ability to produce one of two goods at relatively lower cost. D) a factor of production only if it occurs naturally.
All of the following are reasons that trade between nations is beneficial EXCEPT
A) gains from specialization. B) exchange of ideas. C) protection of domestic industries. D) gains from trade.