A decrease in the unemployment rate will shift the production possibilities frontier outward from the origin.

Question

Quizplus · Accepted Answer

The production possibilities frontier (PPF) represents the maximum output combinations of two goods or services an economy can achieve when all resources are fully and efficiently utilized. A decrease in the unemployment rate does not directly shift the PPF outward; instead, it means the economy is moving closer to its existing PPF by utilizing idle resources. An outward shift of the PPF would require growth in the economy's resources or technological advancements, not just changes in unemployment rates.

A Decrease in the Unemployment Rate Will Shift the Production