Refer to the diagram below.A shift in the production possibilities curve from AB to CD is most likely due to:

Question

Quizplus · Accepted Answer

A shift in the production possibilities curve (PPC) from AB to CD suggests an increase in the economy's potential output, which is likely due to an increase in the quantity and quality of labor resources. This could be because of factors such as education and training, immigration, or an increase in the population. Option A is incorrect because an efficient use of resources would lead to movement along the PPC, not a shift. Option B is incorrect because an increase in spending may lead to short-term economic growth, but it would not cause a shift in the PPC. Option C is incorrect because government purchases of the economy's output may increase aggregate demand, but again, it would not cause a shift in the PPC on its own.

Refer to the Diagram Below