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Question
True or False with Reason:
Production possibility frontier shifts towards right when an economy moves from a situation of underutilisation to fuller utilisation of resources.
True or False
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Solution
This statement is false.
Reason:
- Moving from underutilisation to fuller utilisation changes the economy’s operating point, not its productive capacity.
- The economy moves from inside the PPF to a point on the existing PPF; the frontier does not shift.
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