Unemployment would cause an economy to a. produce inside its production possibilities frontier. b. produce on its production possibilities frontier. c. produce outside its production possibilities frontier. d. experience an inward shift of its production possibilities frontier.

Question

Social Studies

Penelope

14 April, 13:45

Unemployment would cause an economy to a. produce inside its production possibilities frontier. b. produce on its production possibilities frontier. c. produce outside its production possibilities frontier. d. experience an inward shift of its production possibilities frontier.

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Answers (1)

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Kendall Austin · Answer 1

Answer: Option (A) is correct.

Explanation:

Unemployment is a situation under which an individual who is capable and are looking for job but cannot find one. When a commodity is being produced on the Production possibility frontier curve it tends to state that the scarce resources are being allocated in order to produce the maximum output possible. Unemployment in economical sense refers to the situation under which the human capital tends not to be completely employed thus the resources are not being fully utilized. Therefore, leading to a decrease in level of production and thus an economy will produce services inside PPF.