What does “guns and butter” refer to?


Guns and butter explains the relationship between two goods that are important for long-term nation’s economic growth and stability. This is a classic example of production possibility frontier (PPF) defines the relationship and conflict between the investment of the state in military, defense and civilian products.

Countries must choose between two options when spending limited resources or purchase of goods in favor of local citizens and use of these resources for territorial expansion and security, the capital allocation for military forces and equipment. These competing priorities characterize the choice of the nation and identity in world societies.

Politicians use “guns or butter” arguments, state positions on national priorities, and deeply affecting gross domestic product (GDP) and economic policy. All Nations should determine the balance of guns and butter to meet internal and external needs. under the influence of local economic conditions and military positions of potential adversaries.

To learn more, read the basics of Economics: production possibility frontier, growth, costs, and trade.

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