Assume an economy is incurring unemployment.The effect of resolving this problem will be to:
A) move the level of actual output on to the economy's production possibilities curve.
B) create a less equal distribution of income.
C) shift its production possibilities curve to the left.
D) shift its production possibilities curve to the right.

Question

Quizplus · Accepted Answer

Resolving unemployment in an economy allows it to utilize idle resources, including labor, more efficiently. This means the economy can produce more goods and services, effectively moving the level of actual output closer to or onto its production possibilities curve, which represents the maximum output levels for two goods or services that an economy can achieve when all resources are fully employed. Choices B, C, and D do not directly result from resolving unemployment in terms of moving towards the production possibilities curve.

Assume an Economy Is Incurring Unemployment