- 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

If the economy is producing at point U, it is likely operating below its potential, leading to underutilization of resources. As plants and equipment wear out without replacement or investment, the PPC will shift inward due to decreased productive capacity.