Which scenario shifts the production possibilities frontier outward?

Question

Quizplus · Accepted Answer

Capital accumulation is investment in capital goods, such as machinery and equipment, that can increase the productivity of a country's economy. This can lead to an outward shift in the production possibilities frontier because the economy is able to produce more goods and services with the same amount of resources. A decreasing population (A) would lead to a smaller workforce and less resources, which would cause the production possibilities frontier to shift inward. Increasing prices (C) would only affect the slope of the production possibilities frontier and not shift it outward. Increasing consumption (D) would lead to a shift along the production possibilities frontier, but not an outward shift.

Which Scenario Shifts the Production Possibilities Frontier Outward