If the unemployment rate increases from 10% to 14%, the economy will
A) move closer to a point on the ppf.
B) move away from the ppf toward the origin.
C) remain on the ppf.
D) remain on the origin.

Question

Quizplus · Accepted Answer

An increase in the unemployment rate from 10% to 14% indicates that fewer resources are being utilized in the economy, which suggests that the economy is moving away from its production possibilities frontier (PPF) toward the origin, as it is not achieving full employment or efficient use of resources.

If the Unemployment Rate Increases from 10% to 14%, the Economy