Capital investment refers to the allocation of resources towards the creation of new capital goods, such as machinery, technology, and infrastructure. When a country invests in these areas, it enhances its productive capacity, allowing it to produce more goods and services. This increase in potential output is represented by an outward or rightward shift of the production possibilities curve (PPC). The PPC illustrates the maximum possible output combinations of two goods that an economy can achieve given its resources and technology. An outward shift indicates that the economy can now produce more of both goods than before, reflecting growth and improved efficiency.