5 points) State whether each of the following statements are True or False. If t

Question

5 points) State whether each of the following statements are True or False. If the statement is false, please state why it is false.

a) An increase in Real GDP means that the Production Possibility Curve must move outward.

b) There is no cost to the macroeconomy of current consumption.

c) Increased Capacity Utilization means that the PPF is moving outward.

d) Gross Investment being greater than the amount of capital depreciated will help lead to Economic Growth, ceteris paribus.

e) Spending money on increases in human capital shifts the PPF outward, ceteris paribus.

Explanation / Answer

a) False , the production possibility shows total amount of output economy a country can produce with limited set of resources .Hence the gdp increase cannot lead to an outward movement of the ppf curve it would lead to a parallel shift .

b) False , the cost is future consumption

c) True

d) True

d) Yes keeping in the technology is constant

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