Refer to Figure 17.3.Assume X units of plants and equipment wear out each year.What will happen to the PPC in the future if the economy currently produces at point U?

Question

Quizplus · Accepted Answer

Point U is already producing at the maximum potential of the economy, represented by the PPC. If X units of plants and equipment wear out each year, it means that the economy will have less capacity to produce in the future. Therefore, the PPC will shift inward.