Which of the following could allow the economy to achieve production possibiliti

Question

Which of the following could allow the economy to achieve production possibilities corresponding to point D? A decrease in the unemployment rate. An increase in the unemployment rate. An increase in the size of the labor force. A reallocation of resources away from production of national defense toward the production of other goods and services. Which of the following policies are likely to increase future economic growth of production possibilities? An increase in the proportion of aggregate income devoted to consumption. A change in the tax law that increases incentives to save. A decrease in investment. Improvements in technology that increase the productivity of workers. Both B and D. George spends all his weekly income of $100 on pizza and video rentals. If the price of a pizza is $15 and the price of a video rental is $5 then, other things being equal, which of the following will decrease the opportunity cost of a pizza? A10 percent increase in the price of both pizza and video rental. An increase in the price of video rentals. A decrease in the price of video rentals. A decrease in weekly income. An increase in weekly income. Table below shows how the quantity demanded and quantity supplied of gold varies he price on the Chicago Board of Trade Commodity Market:

Explanation / Answer

Q8. Increase in future economic growth of production possibilities can take place when either of the following or both events occur -

1. Resources at the disposal of economy increases. If resources with economy increases then production potential of economy increases and thus production possibilities also increases and steps up the economic growth.

2. Economy experiences advancement of technology. Improvement or advancement of technology enables the economy to produce more with given set of resources and thus increases the productivity of resources including labor. Increased productivity improves production possibilities and help the economy in achieving economic growth.

Out of given options option A, B, and C are only pointing towards redistribution of resources and thus would not impact the future economic growth pf production possibility.

It is the only option (D) which is augmenting the resources and will impact the future economic growth pf production possibility.

Hence, the correct answer is option (D).

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