Suppose there are two economies, Alpha and Beta, which have the same production possibilities curves. If Beta devotes more resources to produce capital goods than consumer goods as compared to Alpha, then in the future Multiple Choice

A. Alpha will experience greater economic growth than Beta.

B. Beta will experience greater economic growth than Alpha.

C. Alpha will not be able to achieve full employment or productive efficiency.

D. Beta will not be able to achieve full employment or productive efficiency.

The correct answer is option B.

Explanation:

If Alpha and Beta have the same production possibilities curve it means they have the same level of economic growth. Now, if Beta uses its limited resources to produce more capital goods it will experience an increase in economic growth.

This is because capital goods are used for further production of goods and services. So if the production of capital goods increases more goods will be produced using them. This will cause an increase in output level or economic growth.