According to the production possibilities model, if more resources are allocated to the production of physical and human capital, then which of the following is likely to happen?
A) The country's total production will fall.
B) The production possibilities frontier will shift inward in the future.
C) Fewer goods will be produced for consumption today.
D) Future economic growth will decline.
C
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Which of the following would lead to a decrease in the supply of crude oil?
A) Favorable tax breaks for oil companies B) An increase in the demand for crude oil C) An increase in the price of gasoline D) Both A and C. E) None of the above.
Refer to Figure 15-12. In the dynamic AD-AS model, the economy is at point A in year 1 and is expected to go to point B in year 2, and the Federal Reserve pursues policy. This will result in
A) potential real GDP levels lower than what would occur if no policy had been pursued. B) inflation rates higher than what would occur if no policy had been pursued. C) real GDP levels higher than what would occur if no policy had been pursued. D) unemployment rates higher than what would occur if no policy had been pursued.