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

Question

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When the unemployment rate decreases, it means that more people are employed and contributing to the production of goods and services. This would shift the economy closer to the production possibilities frontier, meaning that resources are being used more efficiently and effectively. Thus, a decrease in unemployment can be represented as a movement from a point inside the production possibilities frontier to a point on the frontier.

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