Ceteris paribus,if structural unemployment increases,the economy is
A)Outside the production possibilities curve.
B)Inside the production possibilities curve.
C)On the fixed production possibilities curve.
D)On the production possibilities curve that shifts inward.

Question

Quizplus · Accepted Answer

Structural unemployment is caused by changes in the structure of the economy, such as technological advancements or shifts in consumer preferences, which result in a mismatch of skills and job opportunities. This leads to a decrease in the economy's overall level of production and, consequently, a leftward shift of the production possibilities curve. Therefore, the economy is on the production possibilities curve that shifts inward.

Ceteris Paribus,if Structural Unemployment Increases,the Economy Is