Exhibit 3-3 Refer to Exhibit 3-3.An economy is operating at full employment,and then workers in the bread industry are laid off.This change is portrayed in the movement from:

Question

Exhibit 3-3  Refer to Exhibit 3-3.An economy is operating at full employment,and then workers in the bread industry are laid off.This change is portrayed in the movement from:

Quizplus · Accepted Answer

The movement from C to F represents a decrease in production in the bread industry, leading to a decrease in employment in that sector. This is a shift from a point on the production possibilities frontier to a point inside the frontier, indicating that the economy is now producing less than its potential output. As a result, there is cyclical unemployment, which refers to unemployment caused by a lack of aggregate demand in the economy.