Impact on ppc due to massive earthquake in major part of country.
Answers
Production Possibility Frontier will not be affected by demonetization in India. Production possibility frontier (or curve) is various combinations of commodities that can be produced without wasting any resources. Since resources are not affected, PPF is not affected. To provide an economic system where people make efforts in their own interest to take the country to the frontier is the goal of the government and policy makers. Since demonetization has caused disruptions and there has been wastage, we have certainly moved to a point that is further inside the frontier in comparison to the position before demonetization. Here is how one can compare the two situations - before and after demonetization in the standard two-commodity textbook model: