Which of the following also occurs as the production possibilities curve shifts outward?
A)Long-run aggregate supply increases.
B)GDP per capita remains constant.
C)Output decrease.
D)The unemployment rate rises.

Question

Quizplus · Accepted Answer

An outward shift in the production possibilities curve (PPC) implies an increase in the economy's potential output. This implies a rise in the long-run aggregate supply (LRAS) curve, indicating that the economy can produce more goods and services in the long run. Therefore, A) is the correct choice. B), C), and D) are all incorrect choices because the PPC shift outward typically means a growth in potential GDP (gross domestic product) per capita, an increase in output, and a decline in the unemployment rate.

Which of the Following Also Occurs as the Production Possibilities