A nation that devotes more of its resources to capital investment is likely to:

Question

A nation that devotes more of its resources to capital investment is likely to:

shift outward its production possibilities curve.

shift inward its production possibilities curve.

increase the slope of its production possibilities curve.

decrease the slope of its production possibilities curve.

shift outward its production possibilities curve.

shift inward its production possibilities curve.

increase the slope of its production possibilities curve.

decrease the slope of its production possibilities curve.

Explanation / Answer

A nation that devotes more of its resources to capital investment is likely to cause its production possibilities curve to shift outward. Hence, "Shift outward its production possibilities curve." is correct answer. Because investment in capital works as multiplier, means more production.

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