ECONOMICS
ECONOMIC GROWTH
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Higher prices and more demand for goods.
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Higher employment levels and less machinery.
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Higher output of goods and of services.
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Higher quality or quantity of resources and improved technology.
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Detailed explanation-1: -A division of labour, and specialisation, can considerably improve productive capacity, and shift the PPF outwards.
Detailed explanation-2: -How can the Production-Possibilities Frontier be Shifted? Outward or inward shifts in the PPF can be driven by changes in the total amount of available production factors or by advancements in technology.
Detailed explanation-3: -The factors that lead to an outward shift in the PPF include the advancement in technology and improvement in human capital. Advancement in technology will lead to a higher level of per unit manufactured products for the given level of inputs.
Detailed explanation-4: -Shifting a PPF An increase in the physical quantity or in the quality of factors of production available to an economy or a technological gain will allow the economy to produce more goods and services; it will shift the economy’s production possibilities curve outward.