The economy is currently on its production possibilities frontier (PPF).A politician says that it is possible to get more of everything---more infrastructure,more schools,more national defense,more spending on social programs,and so on.The politician is

Question

Quizplus · Accepted Answer

The politician is correct if assuming a rightward-shifting PPF because this implies economic growth, allowing for more of everything. However, if the PPF does not change, the statement is incorrect because the economy is already at its maximum productive efficiency, and increasing production of one good would require decreasing production of another.

The Economy Is Currently on Its Production Possibilities Frontier (PPF)