-Two countries, Alpha and Beta, have identical production possibilities frontiers. If Alpha produces at point a and Beta produces at point b, then __________.
A) Betaʹs future consumption will be greater than Alphaʹs
B) Alphaʹs and Betaʹs economic growth rates will be the same
C) Alpha consumes less than Beta today, but it will grow faster than Beta
D) Betaʹs economic growth rate will exceed Alphaʹs

Question

-Two countries, Alpha and Beta, have identical production possibilities frontiers. If Alpha produces at point a and Beta produces at point b, then __________.
A) Betaʹs future consumption will be greater than Alphaʹs 
B) Alphaʹs and Betaʹs economic growth rates will be the same 
C) Alpha consumes less than Beta today, but it will grow faster than Beta 
D) Betaʹs economic growth rate will exceed Alphaʹs

Quizplus · Accepted Answer

If Alpha produces at a point that implies less consumption today (likely more investment in capital goods), it will have a higher growth rate in the future compared to Beta, which consumes more today.

-Two Countries, Alpha and Beta, Have Identical Production Possibilities Frontiers