Economic growth is depicted by a:
A) shift in the production possibilities frontier outward.
B) movement from inside the curve toward the curve.
C) shift in the production possibilities frontier inward.
D) movement along a production possibilities frontier toward capital goods.

Question

Quizplus · Accepted Answer

Economic growth is shown by an outward shift in the production possibilities curve because it indicates an increase in the economy's potential to produce goods and services. Movements along the curve represent efficient use of resources, but not growth. Shifts inward represent a decrease in the economy's ability to produce goods and services. Moving toward capital goods is not necessarily a sign of economic growth, as it depends on the specific production possibilities of the economy.

Economic Growth Is Depicted by A