do all economies always operate on PPC?
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Production Possibility Curve shows all the possible combinations of goods that can be produced in an economy with the given resources and technology.
It is not compulsory for the economy to always operate on the PPC curve.
- An economy will operate on the PPC curve, if all the resources are being fully utilised.
- An economy will operate at any point inside the PPC curve, if the resources are not fully utilised.
- An economy cannot operate outside the PPC curve because it is unattainable under the current productive capacity.
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