Question

Using a production possibilities frontier (PPF) diagram, determine how does the PPF change in response to the following events: a) A relaxation of policies allowing more foreign direct investment into the country b) Increasing the minimum wage level c) A decrease in expenditure on research and development d) An increase in the retirement age e) Government policies supporting the provision of services, without affecting manufacturing.

Answer 1

a)Shift to the left

b)shift to the right

c)Shift to the left

d) shift to the right

e) shift to the right