Instructional Video

Khan Academy: Production Possibilities Curve as a Model of a Country's Economy

Curated by ACT

In this video [6:29], Sal explains how the production possibilities curve model can be used to illustrate changes in a country's actual and potential level of output. Concepts covered include efficiency, inefficiency, economic growth and contraction, and recession. When an economy is in a recession, it is operating inside the PPC. When it is at full employment, it operates on the PPC.

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