ECONOMIC GROWTH, PRODUCTION POSSIBILITIES: Economic growth is the process of increasing the economy’s ability to produce goods and services.
It is achieved by increasing the quantity or quality of resources.
This process can be illustrated as an outward shift of the production possibilities curve.
How do you show economic growth?
The simplest way to show economic growth is to bundle all goods into two basic categories, consumer and capital goods. An outward shift of a PPF means that an economy has increased its capacity to produce.
How does a production possibilities curve illustrate economic growth?
It is achieved by increasing the quantity or quality of resources. Production possibilities, which analyzes the alternative combinations of two goods that an economy can produce with given resources and technology, indicates economic growth with an outward shift of the production possibilities curve.
What are some examples of economic growth?
Examples of natural resources which can have major effect on rate of economic growth include fossil fuels, valuable metals, oceans, and wild life. Human resources include both skilled and unskilled workforce. Increase in the quantity and quality of the workforce increases rate of economic growth.
What are economic growth factors?
There are three main factors that drive economic growth: Accumulation of capital stock. Increases in labor inputs, such as workers or hours worked. Technological advancement.