If an economy increases it savings and invests in capital goods today, what will
happen, if anything, to its future PPF?
a) Nothing, since this would be a movement along the PPF from a point that has
mostly consumption goods and few capital goods to another point on the
PPF that has fewer consumption goods and more capital goods.
b) The curve would shift inward because more savings would mean less
spending and less incentive for firs to produce consumption goods in the
future.
c) Nothing, since resources are limited the PPF is fixed in place.
d) The curve would shift outward because increased capital goods will make it
possible to produce more consumption goods in the future.