Figure 2.3 Figure 2.3 shows various points on three different production possibility frontiers for a nation.
-Refer to Figure 2.3.Consider the following movements:
a.from point V to point W
b.from point W to point Y
c.from point Y to point Z
Which of the movements listed above represents economic growth?

Question

Figure 2.3  Figure 2.3 shows various points on three different production possibility frontiers for a nation.
-Refer to Figure 2.3.Consider the following movements: 
a.from point V to point W
b.from point W to point Y
c.from point Y to point Z
Which of the movements listed above represents economic growth?

Quizplus · Accepted Answer

Economic growth is the increase in the production possibilities of an economy, which is shown by shifting the production possibility frontier outwards. In the given figure, movement from point W to point Y and then from point Y to point Z represents an increase in production possibilities, as the production possibility frontier shifts outwards. Therefore, option B, which includes these movements, represents economic growth. Movement from point V to point W does not represent economic growth as it means a decrease in production of one good to increase production of the other good.

Figure 23 Figure 2