What will likely be the impact of large scale outflow of foreign capital on Production Possibility Curve of the economy and why?

Explanation

(i) The Production Possibility Curve shifts to the left.
(ii) It is so because outflow of foreign capital decreases the capital resource in our country leads to fall in production capacity of our country.
(iii) It can be explained with the help of the diagram that PP is at full employment level and due to outflow of foreign capital it shifts leftwards `P_(1)P_(1)`.