Which of the following applies to economic growth?
I. Economic growth allows people to buy more goods and services.
II. Economic growth is the expansion of the economy's production possibilities.
III. Economic growth is represented by a movement from a point inside the production possibilities curve to a point on the curve.

Question

Quizplus · Accepted Answer

Option I is true as economic growth leads to an increase in the level of production, resulting in more goods and services being available for consumption.

Option II is also true as economic growth is the expansion of an economy's production capabilities or potential output, which is achieved through an increase in the quantity or quality of resources, technological advances or improvements in efficiency.

Option III is false as the movement from a point inside the production possibilities curve to a point on the curve represents an increase in the efficiency of resource use or better use of existing resources, rather than economic growth.

Which of the Following Applies to Economic Growth