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What Will Likely Be the Impact of Large-scale Outflow of Foreign Capital on Production Possibilities Curve of the Economy and Why? - Economics

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Question

What will likely be the impact of large-scale outflow of foreign capital on Production Possibilities curve of the economy and why?

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Solution

The large-scale outflow of foreign capital will lead to a decrease in the availability of a resource, thereby the PPC will shift to the left from EF to GH.

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2014-2015 (March) Delhi Set 2
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