Answer to Question #270455 in Economics for Lindokuhle

Question

List and discuss the two main factors of economic growth according to the production possibility Frontier model.

Answer 1

The Production-Possibilities Frontier refers to the idea that in a given economy, factors of production such as labor. Governments and economists usually refer to three main key performance indicators (KPIs) to assess the strength of a nation's labor force and capital are scarce.

The simplest way to show economic growth is to bundle all goods into two basic categories, consumer and capital goods. An outward shift of a PPF means that an economy has increased its capacity to produce.