Use the Following to Answer Questions

Multiple Choice

Use the following to answer questions .
Exhibit: Investment and Production Possibilities
-(Exhibit: Investment and Production Possibilities) Suppose the economy is operating on curve B and there is positive depreciation to its existing capital stock. The decision to produce at point r is likely to
I. shift the production possibilities curve slowly toward curve C.
II. shift the production possibilities curve slowly toward curve A.
III. reduce the economy's capital stock.
IV. result in a negative net private investment.

A) I and IV only
B) II and III only
C) II and IV only
D) II, III, and IV