Country X has a high unemployment rate. It follows that country X is operating
A)beyond its production possibilities frontier (PPF).
B)on its PPF.
C)inside (below)its PPF.
D)at a productive efficient point.

Question

Quizplus · Accepted Answer

If country X was operating on its PPF or beyond its PPF, it would be producing efficiently and should not have a high unemployment rate. The high unemployment rate suggests that the country is producing below its PPF, meaning that it is not using all of its available resources efficiently to produce goods and services, resulting in a shortfall in production and consequent unemployment.

Country X Has a High Unemployment Rate