Use the following to answer questions .
Exhibit: Production Possibilities Curves 2
-(Exhibit: Production Possibilities Curves 2) The movement from point R inside the frontier CD to point P on the frontier CD
I. will increase real RGDP.
II. will increase the size of the nation's labor force.
III. represents economic growth.

Question

Use the following to answer questions .
Exhibit: Production Possibilities Curves 2 
-(Exhibit: Production Possibilities Curves 2) The movement from point R inside the frontier CD to point P on the frontier CD
I. will increase real RGDP.
II. will increase the size of the nation's labor force.
III. represents economic growth.

Quizplus · Accepted Answer

Moving from a point inside the production possibilities frontier to a point on the frontier indicates more efficient use of resources, thus increasing real RGDP. It does not necessarily increase the labor force or represent economic growth, which would involve shifting the frontier outward.

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