Practice question · Put in order
Order this economy’s journey on its PPF diagram.
- It shifts output toward capital goods along the curve
- Recovery re-employs idle workers, moving toward the frontier
- It reaches the curve: full employment, binding trade-offs
- The accumulated capital shifts the whole frontier outward
- Recession leaves it producing deep inside the curve
Hints
- Reaching the curve must come before moving along it.
- Pushing the curve outward is the last step, not the first.
Show the answer
- Recession leaves it producing deep inside the curve
- Recovery re-employs idle workers, moving toward the frontier
- It reaches the curve: full employment, binding trade-offs
- It shifts output toward capital goods along the curve
- The accumulated capital shifts the whole frontier outward
Why
Inside → onto → along → outward: recovery, efficiency, investment, growth, a macroeconomics course in one path.
Practise The Production Possibilities Frontier
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More questions on The Production Possibilities Frontier
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