Question

If production possibilities frontier shifted to the right, this would show _______.

• A. increasing unemployment
• B. increase opportunity cost
• C. steep inflation
• D. economic growth

Answer 1

The correct option is D economic growth

If the production possibility frontier shifts to the right, this would show economic growth. Where there is an advancement of technology or increase in availability of resources or introduction of a production method with improved efficiency in respect to both the goods, then PPF will shift to the right, i.e. outwards. This is because the more of goods are being produced due to the above factors and this increase signifies economic growth.