Economics Production Possibility Frontier Questions
Economic growth expands the production possibility frontier (PPF) by increasing the potential output of an economy. It allows for the production of more goods and services, leading to an outward shift of the PPF. This is because economic growth is typically accompanied by advancements in technology, increased capital investment, and improved productivity, which enable the economy to produce more with the same amount of resources. As a result, the economy can achieve higher levels of production and consumption, leading to an expansion of the PPF.