Which process involves an increase in the quantity and/or quality of factors of production, shown by an outward shift of the PPC?

The process that involves an increase in the quantity and/or quality of factors of production, which is reflected by an outward shift of the Production Possibility Curve (PPC), is known as potential growth. This occurs when an economy expands its productive capacity, allowing it to produce more goods and services in the future.

An outward shift in the PPC indicates that the economy can produce more of both goods represented on the axes without sacrificing the quantity of one for the other. This shift might result from various factors, such as an increase in the labor force, improvements in technology, or advancements in education and training, which enhance the quality of labor.

Potential growth contrasts with actual growth, which refers to a short-term increase in output that occurs when an economy utilizes its existing resources more efficiently, moving towards the PPC but not expanding it. Temporary growth does not encompass structural changes in the economy that enhance capacity, and nominal growth typically refers to growth measured in current prices without adjusting for inflation, which doesn't relate to the shift in the PPC itself.