Question
Suppose an economy experiences an increase in unemployment across all industries. What is the result of this increase in unemployment on the production possibilities curve?(1 point)
Responses
The curve would shift inward because labor is considered a factor of production. By reducing productive resources, the maximum level of production will decrease.
The curve would shift inward because labor is considered a factor of production. By reducing productive resources, the maximum level of production will decrease.
The level of unemployment has no effect on the production possibilities curve, so there would be no change to the production possibilities curve.
The level of unemployment has no effect on the production possibilities curve, so there would be no change to the production possibilities curve.
The slope of the production possibilities curve would decrease because an increase in unemployment would decrease the maximum level of production.
The slope of the production possibilities curve would decrease because an increase in unemployment would decrease the maximum level of production.
The curve would shift outward because labor is considered a factor of production. By increasing productive resources, the maximum level of production will increase
Responses
The curve would shift inward because labor is considered a factor of production. By reducing productive resources, the maximum level of production will decrease.
The curve would shift inward because labor is considered a factor of production. By reducing productive resources, the maximum level of production will decrease.
The level of unemployment has no effect on the production possibilities curve, so there would be no change to the production possibilities curve.
The level of unemployment has no effect on the production possibilities curve, so there would be no change to the production possibilities curve.
The slope of the production possibilities curve would decrease because an increase in unemployment would decrease the maximum level of production.
The slope of the production possibilities curve would decrease because an increase in unemployment would decrease the maximum level of production.
The curve would shift outward because labor is considered a factor of production. By increasing productive resources, the maximum level of production will increase
Answers
GPT-4o mini
The correct answer is:
**The curve would shift inward because labor is considered a factor of production. By reducing productive resources, the maximum level of production will decrease.**
An increase in unemployment implies that the economy is utilizing its labor resources less effectively, which reduces the overall productive capacity of the economy. Therefore, the production possibilities curve (PPC) shifts inward, indicating a decrease in maximum possible production levels.
**The curve would shift inward because labor is considered a factor of production. By reducing productive resources, the maximum level of production will decrease.**
An increase in unemployment implies that the economy is utilizing its labor resources less effectively, which reduces the overall productive capacity of the economy. Therefore, the production possibilities curve (PPC) shifts inward, indicating a decrease in maximum possible production levels.