Resource Allocation for Economic Growth

Steps:

• PPC outward shift occurs from increased resources, technology, or capital investment.
• Positions on PPC represent trade-offs between consumer and capital goods.
• Allocating more to capital goods boosts future productivity, causing larger shifts.
• Option D shows maximum capital goods production, maximizing growth potential.

Why D is correct:

• Economic theory states that higher capital investment expands production capacity, leading to the greatest PPC shift via compound growth in resources.

Why the others are wrong:

• A: Inside PPC point indicates inefficiency, yielding minimal growth.
• B: Balanced allocation limits capital buildup for future expansion.
• C: Consumer goods focus prioritizes current output over long-term capacity.

Final answer: D