Consider the production possibilities boundary (PPB)of an economy. Economic growth is illustrated by
A)a movement onto the PPB.
B)an outward shift of the PPB.
C)a movement along the PPB.
D)the negative slope of the PPB.
E)the movement to a point outside of the PPB.

Question

Quizplus · Accepted Answer

Economic growth is represented by an outward shift of the PPB, indicating that the economy is capable of producing more goods and services than before. A movement onto or along the PPB represents no growth or a shift in production from one good or service to another, while a point outside the PPB is unattainable with the current level of resources and technology. The negative slope of the PPB simply illustrates the concept of opportunity cost.

Consider the Production Possibilities Boundary (PPB)of an Economy