When a nation's economy grows:

Question

Quizplus · Accepted Answer

Economic growth means an increase in the capacity of an economy to produce goods and services. This increase in capacity is reflected in the expansion of the production possibility frontier (PPF) of the economy. The PPF shows the different combinations of two goods that an economy can produce with the given resources and technology. When an economy grows, it can produce more of both goods, and the PPF shifts outward to reflect this increase in capacity. Hence, choice A is the correct answer.

When a Nation's Economy Grows