economics

The domestic economy's consumption possibilities curve can be greater than the domestic economy's production possibilities curve. Why is this true?

  1. 👍 0
  2. 👎 0
  3. 👁 42
asked by Molly
  1. 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.

    1. 👍 0
    2. 👎 0

Respond to this Question

First Name

Your Response

Similar Questions

  1. Economics

    why with international trade, the domestic economy's consumption possibilities curve can be greater than the domestic economy's production pssibilities curve.

    asked by Josh on April 7, 2008
  2. econ

    Suppose the country of Maverick has specialized in the production of a good but has not yet entered into trade. At this point in time, Maverick has A. Moved to a level of production outside its production possibilities curve. B.

    asked by jj on May 8, 2012
  3. social studies

    Our economy ______ operates on its production possibility curve. A. always B. usually C. sometimes D. never I'm stuck between B and C. Here's the text: "Usually there's some economic slack, but every so often we do manage to

    asked by tony on December 10, 2010
  4. economic

    Draw a production possibilities curve for a hypothetical economy producing capital good and consumer goods. Suppose a major technological breakthrough occurs I the capital goods industry and the new technology is widely adopted

    asked by thiti on February 9, 2014
  5. economics

    how does production possibilities curve illustrate how efficent an economy is?

    asked by teleisha on October 9, 2008
  6. Economics

    How does a production possibilities curve illustrate how efficient an economy is?

    asked by Pauline on September 18, 2008
  7. Economics

    How can an economy achieve points that are outside the production possibilities curve?

    asked by Cleopatra on December 4, 2015
  8. Econ

    1.ÊA production-possibilities curve indicates the:Ê A.ÊCombinations of goods and services an economy is actually producing. B.ÊMaximum combinations of goods and services an economy can produce given its available resources and

    asked by jordan on July 11, 2010
  9. principles of macroeconomics

    It is possible for an economy to increase its production of computers and, at the same time, to increase its production of cars if the economy a. moves downward and to the right along its production possibilities frontier and the

    asked by elizabeth on September 6, 2008
  10. Economics

    1) The long run growth rate of the economy is consistent with: a.An outward expansion the economy's production possibilities frontier. b.A rightward shift in the aggregate demand curve. c.An inward expansion the economy's

    asked by Julia on September 1, 2009

More Similar Questions