Responses
The curve would shift outward because labor is considered a factor of production. By increasing productive resources, the maximum level of production will increase.
The curve would shift outward because labor is considered a factor of production. By increasing productive resources, the maximum level of production will increase.
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 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 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.
1 answer
The correct response 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.
When unemployment increases across all industries, it indicates that fewer resources (specifically labor) are being utilized in the economy. This reduction in effective productive resources leads to a decrease in the maximum potential output, hence the production possibilities curve (PPC) shifts inward.
