Economic growth is represented on a macro production possibilities frontier (PPF) by a(n)
A) movement along the PPF.
B) movement from a point inside the PPF to a point on the PPF.
C) point outside the PPF.
D) point inside the PPF.
E) outward shift of the PPF.

Question

Quizplus · Accepted Answer

Economic growth is represented by an outward shift of the PPF, as it reflects an increase in the economy's ability to produce goods and services. As the PPF shifts outwards, more production is possible with the same amount of inputs, or the same level of production is possible with less input.

Economic Growth Is Represented on a Macro Production Possibilities Frontier