As an economy grows, its production possibilities frontier (PPF) shifts outward, indicating that the economy can produce more goods and services than before due to factors like increased resources, better technology, or improved efficiency.

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As an Economy Grows

Question 28

Multiple Choice

As an economy grows,

A) it can eliminate scarcity.
B) the opportunity cost of production will increase.
C) the opportunity cost of production will approach 0.
D) its PPF shifts outward.
E) its PPF does not shift; instead, the production point moves from inside the PPF to be closer to the PPF.

Correct Answer: