CLEP Principles of Macroeconomics Exam Prep

Answer - D - The production possibilities curve, sometimes shortened to PPC, refers to the graphical method of illustrating the complicated economic relationship between consumption and spending.

Key Takeaway: The production possibilities curve is typically used to answer a very basic question that every economy must answer: what should be produced? A Production Possibilities Curve (PPC) illustrates the different rates of production of two goods given limited resources. The PPC shows the efficiency, opportunity costs, and production rates of the two goods. The PPC also shows the maximum obtainable amount that is produced for both products under certain circumstances.