Which of the following would cause an economy to produce at a point inside its production possibilities curve?

Question

Quizplus · Accepted Answer

If there is unemployment and an inefficient use of available resources, then the economy is producing at a point inside its production possibilities curve. This means that the economy is not utilizing all of its resources and is not producing goods and services at its maximum potential. A point inside the production possibilities curve indicates that the economy is not operating at its full potential, which can be due to various factors such as inefficient allocation or utilization of resources. Therefore, option C is the correct answer. Options A, B, and D involve factors that would actually push the production possibilities curve outward, resulting in the economy being able to produce more goods and services at a higher efficiency level.

Which of the Following Would Cause an Economy to Produce