Statement I: Institutional constraints such as "blue laws" or child labor laws put restrictions on our capacity to produce and thus limit our production possibilities curve.
Statement II: We would be operating at full employment with an unemployment rate of five percent and a capacity utilization rate of 85 percent.
A)Statement I is true and statement II is false.
B)Statement II is true and statement I is false.
C)Both statements are true.
D)Both statements are false.

Question

Quizplus · Accepted Answer

Institutional constraints like "blue laws" or child labor laws can indeed limit production possibilities by restricting certain types of labor or business operations, thus affecting the production possibilities curve. Additionally, full employment in economic terms often includes a natural rate of unemployment, which can be around five percent, and a capacity utilization rate of 85 percent is generally considered efficient.

Statement I: Institutional Constraints Such as "Blue Laws" or Child