Figure 5.1. The figure shows a linear production possibility curve representing a tradeoff faced by a country, between necessities and luxuries.
-Refer to figure 5.1. An increase in the country's gross domestic product will cause:
A)no change in the production possibility curve of the country.
B)an upward movement along the production possibility curve.
C)a downward movement along the production possibility curve.
D)an inward shift in the production possibility curve.
E)a rightward shift in the production possibility curve.

Question

Figure 5.1. The figure shows a linear production possibility curve representing a tradeoff faced by a country, between necessities and luxuries​. 
-Refer to figure 5.1. An increase in the country's gross domestic product will cause:​
A)​no change in the production possibility curve of the country. 
B)​an upward movement along the production possibility curve. 
C)​a downward movement along the production possibility curve. 
D)an ​inward shift in the production possibility curve. 
E)​a rightward shift in the production possibility curve.

Quizplus · Accepted Answer

An increase in a country's gross domestic product (GDP) indicates economic growth, which typically allows for an expansion in the production of goods and services. This is represented by a rightward shift in the production possibility curve, as the country can now produce more of both goods than before.

Figure 51 the Figure Shows a Linear Production Possibility Curve Representing