Question:
How can the Output Gaps be shown on a PPF?
Author: eric_galvaoAnswer:
-Point inside the PPF reprsents a Negative Output Gap. This shows resources are not Fully used up -Point On the PPF represents the Economy at Full Capacity - All reources are used -Point Outsdie the PPF has the Economy making output Beyond its Potential - Perhaps workers are doing Awfully long hours or Machines overused. This is a Positive Output Gap.
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