Which of the following events create an outward shift of the production possibilities curve?
A)The United States moves resources from the production of goods for domestic production to the production of goods for export.
B)Tax reductions reduce the cost and increase the volume of investment in factories, machinery, and research and development.
C)There is an exodus of young people to another country where there is more political freedom.
D)The unemployment rate falls from 33 percent to 12 percent.

Question

Quizplus · Accepted Answer

Tax reductions reducing the cost and increasing the volume of investment in factories, machinery, and research and development will lead to an increase in the economy's potential output, causing an outward shift of the production possibilities curve. The other options do not have a direct impact on the production possibilities curve.

Which of the Following Events Create an Outward Shift of the Production