Is increased capital spending the only way for an economy to expand its production possibilities frontier?
A. No, an economy can also expand by invention and innovation.
B. No, an economy can also grow by investment instead of capital spending.
C. Yes, more capital is the only way to expand its production possibilities frontier.
D. Yes, although more capital clearly has a high opportunity cost.
E. Yes, because capital is the only constraining resource that limits growth.
Answer: A
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a. True b. False
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The measure of the cost of a standard basket of goods and services in any period relative to the cost of the same basket of goods and services in the base year is called the:
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A) 0.25 board feet of lumber B) 4 board feet of lumber C) 12 board feet of lumber D) 16 board feet of lumber