In Terms of the Production Possibility Frontier, an Increase in Productivity

question 176

Multiple Choice

In terms of the production possibility frontier, an increase in productivity attributable to new technology would best be shown by

• A) a movement along the frontier.
• B) the production possibility frontier shifting outward, away from the origin.
• C) a movement from a point inside the frontier to a point on it.
• D) a movement toward the origin.

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Definitions:

Standard Deviation

A statistical measure of the dispersion or spread of a set of data points or investment returns around their mean.

Expected Return

The predicted amount of profit or loss an investment is expected to generate over a specific time period.

Probability Distribution

A mathematical formulation that presents all potential values and their chances for a random variable within a particular range.

Real Rate of Return

The annual percentage profit earned on an investment, adjusted for changes in the price level due to inflation or deflation.