A reduction in the amount of unemployment
A) shifts the production possibilities frontier outward.
B) moves the economy's point of production closer to the production possibilities frontier.
C) moves the economy's point of production along the production possibilities frontier.
D) moves the economy's point of production further away from the production possibilities frontier.

Question

Quizplus · Accepted Answer

A reduction in the amount of unemployment means that more resources (in this case, labor) are being utilized in the economy. This does not change the economy's capacity (or the production possibilities frontier itself) but rather allows the economy to operate closer to its maximum potential output, hence moving the point of production closer to the production possibilities frontier.

A Reduction in the Amount of Unemployment