The United States uses tax funds to build and repair the interstate highway system and to provide health care services via Medicare. Suppose Medicare services are on the horizontal axis and highway miles are on the vertical axis of a PPF. If the government decides to reduce funding to Medicare, this change would be shown as

Question

Quizplus · Accepted Answer

Reducing funding to Medicare would mean reallocating resources towards highway miles, resulting in a movement up along the PPF, indicating more highway miles and fewer Medicare services.

The United States Uses Tax Funds to Build and Repair