Question

If a country must decrease current consumption to increase the amount of capital goods it produces today, then it:

A) Faces a trade-off between present and future consumption
B) Can increase both present and future consumption simultaneously
C) Is experiencing economic growth
D) Has unlimited resources

Answer 1

If a country must decrease current consumption to increase the amount of capital goods it produces today, then it faces a trade-off between present and future consumption.

Step-by-step explanation:

If a country must decrease current consumption to increase the amount of capital goods it produces today, then it faces a trade-off between present and future consumption. When a country decides to invest more in producing capital goods, it means using resources that could have been used for immediate consumption. This trade-off requires sacrificing present consumption in order to have more capital goods and increase future production and consumption.