A decrease in the unemployment rate may be represented as a movement from a point on the production possibilities frontier to a point outside the frontier.

Question

Quizplus · Accepted Answer

A decrease in the unemployment rate would be represented as a movement from a point inside the production possibilities frontier (PPF) to a point on the frontier, not outside it, as the PPF represents the maximum possible output with full employment of resources.

A Decrease in the Unemployment Rate May Be Represented as a Movement