Consider the production possibilities boundary (PPB)of an economy.Economic growth is illustrated by
A)a movement onto the PPB.
B)an outward shift of the PPB.
C)the movement to a point outside of the PPB.
D)the negative slope of the PPB.
E)a movement along the PPB.

Question

Quizplus · Accepted Answer

Economic growth is illustrated by an outward shift of the PPB, as it indicates an increase in the economy's capacity to produce goods and services. A movement onto the PPB, a movement along the PPB, and the negative slope of the PPB do not necessarily indicate economic growth. The movement to a point outside of the PPB is not possible as it would require the economy to produce more than its maximum potential.

Consider the Production Possibilities Boundary (PPB)of an Economy