PRC-3 · Chapter 9 · Question 14 of 45
A devastating earthquake completely destroys several major industrial zones and power plants in a country. How would this catastrophic event be depicted on the country's Production Possibility Frontier (PPF)?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) An inward shift of the entire PPF
Explanation
The destruction of infrastructure physically reduces the economy's maximum productive capacity, causing the entire PPF boundary to shift inward.
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