If the maximum potential combination of consumer and capital goods produced by an economy has increased over time, which of the following is true? a. Marginal tax rates have increased due to contradictory fiscal policy.  b. Keynesian policy initiatives have allowed for increased consumption of both consumer and capital goods. c. New physical capital has been introduced to firms throughout the economy. d. Resources are being utilized inefficiently at this combination of goods and services.  e. Monetary policy authorities have effectively decreased bank reserves through open market operations.

Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN:9781285165875
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter18: The Markets For The Factor Of Production
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If the maximum potential combination of consumer and capital goods produced by an economy has increased over time, which of the following is true?

a. Marginal tax rates have increased due to contradictory fiscal policy. 

b. Keynesian policy initiatives have allowed for increased consumption of both consumer and capital goods.

c. New physical capital has been introduced to firms throughout the economy.

d. Resources are being utilized inefficiently at this combination of goods and services. 

e. Monetary policy authorities have effectively decreased bank reserves through open market operations.

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