Question

Assume an economy is incurring unemployment. The effect of resolving this problem will be to: Group of answer choices 1. move the level of actual output on to the economy's production possibilities curve.2. create a less equal distribution of income.3. shift its production possibilities curve to the left.4. shift its production possibilities curve to the right.

Answer 1

Answer:

1. move the level of actual output on to the economy's production possibilities curve

Explanation:

Production Possibility Curve is the graphical representation of goods that an economy can produce, given resources & technology.

Points on PPC depict efficient utilisation of resources & technology. Points under PPC reflect underutilisation of resources & technology. Points above PPC are unattainable, being beyond economy's full efficient potential.

Unemployment means under utilisation of  human resource & this leads to production below PPC. So, the unemployment issue would be resolved by  generating better employment opportunities. This better utilisation of resources will tend to move the production output on to the PPC, towards the best potential efficient production - with given resources & technology.