Answer to Question #15705 in Macroeconomics for Brunilda Martini

Question

Country A and country B produce the same consumption good and capital goods and currently have identical production abilities curve they also have the same resources at the Present and have access to the same technology.
a) Currently country A has chosen to produce more consumption goods, compared with country B.Other things being equal, which country will experience the larger outward shift in PPC during the next year?

Answer 1

Other things being equal, country A will experience the larger outward shift in PPC during the next
year, because it will produce more goods in total than country B.