The PPC shifts when the quantity or quality of the factors of production (FOP) improve.
A rise in labour productivity enhances the quality of labour, an FOP. This increases the potential output of the economy.
Choice A is wrong because a fall in unemployment means that some of an economy's resources—labour—are not fully employed.
The following choices decrease FOPs and the PPC shifts inward, not outward:
- (Choice B) A natural disaster would destroy a nation's capital.
- (Choice D) Migration would lessen the amount of available labour in a country.
