Economic Growth and PPF

Economic Growth and PPF - PRINCIPLES OF MACROECONOMICS...

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PRINCIPLES OF MACROECONOMICS MODELS IN MACROECONOMICS Foster
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Foster 2 Economic Growth and the PPF With additional resources or an improvement in technology, the economy can produce more computers, more wheat or any combination in between Economic growth shifts the PPF outward. Spring 2010
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Foster 3 Economic Growth and the PPF With an improvement in technology of just one of the goods, the economy can still produce more computers, more wheat or any combination in between Economic growth shifts the PPF outward. Spring 2010
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Foster 4 Economic Growth and the PPF Which of the two goods had an improvement in technology? Economic growth shifts the PPF outward. Spring 2010
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5 The Shape of the PPF The PPF could be a straight line, or bow- shaped If opp. cost remains constant, PPF is a straight line. (In the previous example, opp. cost of a computer was always 10 tons of wheat.) If opp. cost of a good rises as the economy produces more of the good, PPF is bow- shaped. Spring 2010
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This note was uploaded on 02/28/2011 for the course ECON 011 taught by Professor Yezer during the Spring '07 term at GWU.

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Economic Growth and PPF - PRINCIPLES OF MACROECONOMICS...

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