If an economy is currently producing on its production possibilities curve, a rightward shift of the
curve is a necessary but not suﬃcient condition for welfare-maximizing economic growth.

Question

Quizplus · Accepted Answer

A rightward shift of the production possibilities curve indicates an increase in potential output and growth opportunities for an economy. However, maximizing welfare requires more than just achieving higher levels of output; it also requires ensuring equitable distribution of the benefits of economic growth and minimizing externalities such as pollution or resource depletion. Therefore, a rightward shift alone is necessary but not sufficient for welfare-maximizing economic growth.

If an Economy Is Currently Producing on Its Production Possibilities