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The Nationʹs Production Possibilities Frontier Is Bowed Outward

Question 361

Multiple Choice

The nationʹs production possibilities frontier is bowed outward. Suppose that the government decides to increase the production of armaments by $20 billion, and that as a result the output of consumer goods falls by $20 billion. If a further $20 billion increase beyond the initial $20 billion increase in armaments output is sought, we can expect that the output of consumer goods and services will fall further by


A) more than $20 billion.
B) $20 billion.
C) less than $20 billion.
D) There is not enough information to determine the answer.

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