Which Does Not Shift a Macro Production Possibilities Frontier

question 94

Multiple Choice

Which does not shift a macro production possibilities frontier?

• A) increased unemployment
• B) increased labour force participation rate
• C) increased entrepreneurship.
• D) increased quantity of land contributing to production.
• E) increased education

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Definitions:

Capital Stock

The total amount of physical, financial, and human capital available in an economy, used to produce goods and services.

Gross Investment

The total amount of investment spent on new fixed investment plus replacement investment, without accounting for depreciation.

Net Investment

The total amount invested in buying new capital and replacing depreciated capital within a specific period.

Potential Output

The highest level of real GDP that can be sustained over the long term without increasing inflation, reflecting the maximum productive capacity of an economy.