An increase in total spending generates economic growth by shifting the production possibilities
curve farther from the origin.

Question

Quizplus · Accepted Answer

An increase in total spending can lead to economic growth by increasing demand and production, but it does not shift the production possibilities curve (PPC); instead, it moves the economy closer to its existing PPC. The PPC shifts outward with improvements in technology or increases in resources.

An Increase in Total Spending Generates Economic Growth by Shifting