Question

When we talk about production possibility, Economic growth occurs only when the maximum possibility production has reached a new limit via technology or other factor? What about an economy which was at a lower level of production has reached its maximum production level. Will this be called an economic growth?

Answer 1

In the context of PPF (Production Possibility Frontier) economic growth can be termed as any rightward shift of the PPF curve.In question, it is stated that an economy which was at a lower level of production has reached its maximum production level. This happens because the economy is now properly and efficiently utilizing its limited available resources to produce various commodities. This will not be called as an economic growth.