A reduction in the unemployment rate will cause the nation's production possibilities curve to shift 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 cause the PPC to shift outward; instead, it indicates that the economy is moving closer to its existing PPC by utilizing previously idle resources. An outward shift in the PPC would require an increase in the economy's resources or an improvement in technology.

A Reduction in the Unemployment Rate Will Cause the Nation's