ECONOMICS
ECONOMIC GROWTH
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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an outward shift of the production possibility frontier.
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an outward shift of the consumption possibility frontier.
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a rightward shift of the short run aggregate supply curve.
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a rightward shift of the aggregate demand curve.
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Detailed explanation-1: -Economic growth occurs when an economy’s production at the full employment level increases. Increase in the production at the full employment level is shown by an outward shift of production possibility frontier (PPF).
Detailed explanation-2: -The production possibilities frontier (PPF) illustrates the total production of a country when it uses all its scarce resources. An outward shift of the production possibilities frontier represents an increase in technology, productivity, or supply.
Detailed explanation-3: -Increasing the productivity of workers allows for more production without an increase in resources. And improvements in productivity will shift the frontier outward, which reflects economic growth.
Detailed explanation-4: -As output increased, the PPF curve would be pushed outwards. A new curve, represented in the figure on which Y would fall, would show the new optimal allocation of resources. When the PPF shifts outwards, it implies growth in an economy.