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Economics · Oct / Nov 2020 · Paper 12 · Question 3

2281Production possibility curve (PPC) diagrams

The diagram shows a production possibility curve (PPC) for a country. The country moved from position X to position Y on the PPC. What is the most likely reason for this change?

  1. AFirms have decided to increase investment in technology.
  2. BNew economic resources have been discovered in the country.
  3. CThe government has brought about an increase in living standards.
  4. DThe government has encouraged long-term economic growth.

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Correct answer: C. The government has brought about an increase in living standards.

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