Economics Multiple Choice Question – 18 April 2019

Which of the following will cause an economy to move from point A to point B on the production possibility frontier diagram shown below?

Select ONE answer:

1. A decrease in imports
2. A decrease in interest rates
3. A decrease in consumer spending
4. A decrease in the size of the population

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 3

1. Represents an increase in AD and so would move production point from B to A.
2. Represents an increase in AD and AS so would move production point from B to A and/or shift out PPF.
3. Correct: A movement to a point further inside the PPF represents a fall in output.
4. Shift inwards of the PPF rather than the production point.

 

This work is licensed under a Creative Commons Attribution 4.0 International License.