Country X devoted 70 percent of its resources to consumption, while Country Y devoted 80 percent to consumption. Other things being equal, you can predict that
A) Country Xʹs economy will grow faster than Country Yʹs.
B) Country Yʹs economy will grow faster than Country Xʹs.
C) Country Xʹs opportunity cost of economic growth is lower than Country Yʹs.
D) Country Yʹs rate of capital accumulation is higher than Country Xʹs

Question

Quizplus · Accepted Answer

Country X devotes a smaller percentage of its resources to consumption compared to Country Y, implying that it allocates more resources to investment and capital accumulation, which are key drivers of economic growth. Therefore, Country X's economy is likely to grow faster.

Country X Devoted 70 Percent of Its Resources to Consumption