Using a production possibilities frontier (PPF) diagram, determine how does the PPF change in response to the events describe below. a) A relaxation of policies allowing more foreign direct investment into the country. b) Increasing the minimum wage level. c) A decrease in expenditure on research and development.
Using a production possibilities frontier (
a) A relaxation of policies allowing more foreign direct investment into the country.
b) Increasing the minimum wage level.
c) A decrease in expenditure on research and development.
d) An increase in the retirement age.
e) Government policies supporting the provision of services, without affecting
manufacturing.
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Using a production possibilities frontier (
Make sure to explicitly indicate what sectors you are representing, and what sort of assumptions each event implies (i.e., a neutral effect vs a sector-biased effect). The latter follows from your assumptions on the factor intensity of the sector you are representing
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