Outward Shift of the Production Possibility Curve

Steps:

• Identify that positions X and Y on the PPC represent efficient production points.
• Recognize movement from X to Y indicates an outward shift of the PPC, allowing more output of goods.
• Understand outward shifts result from increases in resources, technology, or efficiency.
• Link the shift to government actions promoting overall economic improvement.

Why C is correct:

• An increase in living standards reflects broader economic growth from government policies, which expands productive capacity and shifts the PPC outward, per the definition of PPC as a frontier of maximum output.

Why the others are wrong:

• A: Technology investment shifts PPC but is a specific input, not the most likely broad reason.
• B: Resource discovery directly expands PPC but ignores government role in living standards.
• D: Encouraging growth is vague and overlaps with C without specifying living standards improvement.

Final answer: C