Unemployment is represented by points 1 inside the macro PPF.
2 outside the macro PPF.
3 to the left of LAS.
4 to the right of LAS.
A) 1 and 3
B) 1 and 4
C) 2 and 3
D) 2 and 4
E) 1 only

Question

Quizplus · Accepted Answer

Unemployment is represented by points inside the macro PPF (as resources are not fully utilized) and to the left of LAS (as there are unemployed resources). Therefore, option A is the correct answer. Option B is incorrect as unemployment is not represented by points outside the macro PPF. Option C is incorrect as points outside the macro PPF represent unattainable combinations of goods and services. Option D is incorrect as points to the right of LAS represent an economy operating above its potential, which typically implies inflationary pressures. Option E is also incorrect as unemployment is not represented by points only inside LAS.

Unemployment Is Represented by Points 1 Inside the Macro PPF