-Assume that the production possibilities curves in the diagram above are those of a closed economy.If the economy can currently produce those combinations of capital and consumption goods shown on production possibilities curve A,and if the quantity of capital goods produced at point W is more than is needed to replace worn out capital goods,then ___________ that the economy will be able to produce those combinations of capital and consumption goods shown on production possibilities curve B ____________.

Question

Quizplus · Accepted Answer

If the economy can currently produce those combinations of capital and consumption goods shown on production possibilities curve A, and if the quantity of capital goods produced at point W is more than is needed to replace worn out capital goods, then it is possible that the economy will be able to produce those combinations of capital and consumption goods shown on production possibilities curve B in the future.

-Assume That the Production Possibilities Curves in the Diagram Above