| What is likely to be the impact of 'Make in India' appeal to the foreign investors by the Prime Minister of India, on the production possibilities frontier of India? Explain. |
| Or |
| What is likely to be the impact of efforts towards reducing unemployment on the production potential of the economy? Explain. |
Answer:
?Make in India? appeal to the foreign investors by the Prime Minister of India will lead to the large scale inflow of foreign capital which will result in the increase in the availability of resources in the economy, thereby shifting the Production Possibility Curve (PPC) parallelly to the right from AB to CD as shown in the following diagram.
Or
Due to the efforts towards reducing unemployment. The point which was earlier below the Production possibility curve (indicating under utilisation of resources) will shift close to or on the PPC (indicating better utilisation of resources). This movement is being depicted in the below graph with the help of the arrow from point P.
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