Asksia AI LOGO

Sia

Question
Statistics
Posted 10 months ago

Which of the following describe two ways to show economic growth in a graphical model?

Choose 1 answer:
(A) An outward shift of the production possibilities curve (PPC); a shift to the right of the long-run Phillips curve (LRPC)
(B) A movement from the interior of a production possibilities curve (PPC) to the curve; a shift to the right of aggregate demand (AD)
(c) A shift to the right of the long-run aggregate supply (LRAS) curve; a shift outward of the production possibilities curve (PPC)
(D) A shift to the right of the long-run aggregate supply (LRAS) curve; a shift to the right of aggregate demand (AD)
(E) A shift to the right of the long-run Phillips curve (LRPC); a shift to the right of the short-run Phillips curve (SRPC)
Sign in to unlock the answer
Answer from Sia
Posted 10 months ago
Solution by Steps
step 1
To demonstrate economic growth in a graphical model, we need to identify which curves would indicate an increase in the economy's capacity to produce goods and services
step 2
An outward shift of the production possibilities curve (PPC) indicates that an economy can produce more of both goods, implying growth
step 3
A shift to the right of the long-run aggregate supply (LRAS) curve represents an increase in the full-employment level of output, which is another indicator of economic growth
step 4
The long-run Phillips curve (LRPC) is not directly related to the capacity of the economy to produce goods and services, but rather to the trade-off between inflation and unemployment
step 5
A shift to the right of aggregate demand (AD) does not represent economic growth by itself, as it could lead to higher prices rather than an increase in the production capacity of the economy
Answer
C
Key Concept
Economic growth representation in graphical models
Explanation
Economic growth is represented by an outward shift of the PPC and a rightward shift of the LRAS curve, indicating an increase in an economy's production capacity.

Not the question you are looking for? Ask here!

Enter question by text

Enter question by image

Unlock Smarter Learning with AskSia Super!

Join Super, our all-in-one AI solution that can greatly improve your learning efficiency.

30% higher accuracy than GPT-4o
Entire learning journey support
The most student-friendly features
Study Other Question