Question : Question The blue curve the following graph : 5485

Question

The blue curve on the following graph shows the current production possibilities curve (PPC) for the economy of Tinville. If the economy of Tinville operates at point B, investment in new capital will be just enough to offset depreciation of existing capital. Alternatively, the economy could choose to operate at point A or point C, which would result in different levels of economic growth next year. That is, investment choices today impact the growth of the economy and thus the PPC for next year.

The following graph represents possible PPCs for Tinville next year.

Suppose that this year, the economy operated at point C instead of point B. The PPC that best describes the Tinville economy next year is ______________ (orange, blue, or green) . (Note: The blue PPC is the same as on the graph above.)

CONSUMPTION GOODS 7 PPC Today T-IT-IL TIIIIII-LII CAPITAL GOODS