Asked by Molly
The domestic economy's consumption possibilities curve can be greater than the domestic economy's production possibilities curve. Why is this true?
Answers
Answered by
economyst
One reason is the ability to borrow; we can consume more domestic and foreign goods today at the expense of consuming less tomorrow.
Another reason is inventory buildups. We made goods than we consumed yesterday. So today, we can consume more today than we produce today.
Another reason is inventory buildups. We made goods than we consumed yesterday. So today, we can consume more today than we produce today.
There are no AI answers yet. The ability to request AI answers is coming soon!
Submit Your Answer
We prioritize human answers over AI answers.
If you are human, and you can answer this question, please submit your answer.