If an economy is producing at full employment, it means that:

Question

Quizplus · Accepted Answer

Full employment means that all available resources are being used to produce goods and services. This implies that the economy is producing at its maximum potential, which is represented by the production possibilities curve. Therefore, the economy is producing along the production possibilities curve. Choices A, B, D, and E are incorrect because they suggest that the economy is not producing at its maximum potential, which contradicts the concept of full employment.

If an Economy Is Producing at Full Employment, It Means