PRC-3 · Chapter 9 · Question 24 of 45
If an economy discovers a massive new oil reserve within its borders, how will this affect its Production Possibility Frontier (PPF)?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) The PPF will shift outward
Explanation
An increase in the quantity of available resources (like discovering oil) increases the productive capacity of the economy, causing the PPF to shift outward.
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