If the U.S. reduced its unemployment rate by 2%, this would shift the U.S. production possibilities curve outward.

Question

Quizplus · Accepted Answer

The production possibilities curve (PPC) represents the maximum output combinations of two goods or services an economy can achieve when all resources are fully and efficiently utilized. A reduction in the unemployment rate does not directly shift the PPC outward; instead, it moves the economy closer to its existing PPC by utilizing idle resources. An outward shift in the PPC would require an increase in the economy's resources or an improvement in technology.

If the US Reduced Its Unemployment Rate by 2%, This Would Shift