Better short-run use of current capacity
A)Moves the economy closer to the production possibilities curve,while long-run growth shifts that curve outward.
B)Increases capacity,while long-run economic growth increases capacity utilization.
C)Shifts the aggregate supply curve outward,while long-run economic growth moves the economy up the aggregate supply curve.
D)And long-run growth both shift the aggregate supply curve outward.

Question

Quizplus · Accepted Answer

Better short-run use of current capacity refers to optimizing the current resources of an economy to produce goods and services efficiently. This will help the economy move closer to its production possibilities curve in the short-term. On the other hand, long-run growth, through investments in capital, technology, and education, will shift the production possibilities curve outwards, leading to an increase in the economy's capacity to produce goods and services in the long-term. Therefore, option A is the best choice as it correctly identifies the effects of better short-run use of current capacity and long-run growth on the economy's production possibilities curve.

Better Short-Run Use of Current Capacity