In terms of an economy's production possibilities curve,a decrease in the level of human capital,ceteris paribus,will cause
A)An inward shift of the curve.
B)A movement from the curve to a point inside the curve.
C)A movement along the curve.
D)An expansion of the curve.

Question

Quizplus · Accepted Answer

A decrease in the level of human capital means a decrease in the skills, knowledge, and education of the labor force. This will result in a decrease in productivity and thus a decrease in the economy's potential output. Therefore, the production possibilities curve will shift inward, reflecting the reduced capacity to produce.

In Terms of an Economy's Production Possibilities Curve,a Decrease in the Level