Final answer:
The outward shift from PPF1 to PPF2 represents economic growth, indicating an increase in resource availability or technological improvements that enable a higher production potential. Option C.
Step-by-step explanation:
When a society moves from point A to point B along PPF1, resulting in an expansion to PPF2, this represents economic growth.
The Production Possibilities Frontier (PPF) is an economic model that shows the combinations of two goods that an economy can produce with its existing resources and technology.
An outward shift of the PPF suggests that there has been an increase in resource availability, improvements in technology, or both, allowing for an increase in the potential production of all goods.
What we can infer here is that the economy is not facing decline, regression, or depletion, but instead, it is growing, which is indicative of more resources or better technology allowing for greater output potential.
Hence, the right answer is option C.