Time Left:1:04:57 Chase Christiansen: Attempt 1 Qtion 11 (d point) ns aved Which
ID: 1141159 • Letter: T
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Time Left:1:04:57 Chase Christiansen: Attempt 1 Qtion 11 (d point) ns aved Which of the following statements is correct? A) An increase in unemployment shifts the economy further inside its production O B) An increase in productivity shifts the economy from producing at a point on the possibilities frontier. production possibilities frontier to a point outside the production possibilities frontier possibilities frontier back to the production possibilities frontier. An increase in productivity moves the economy from inside the production possibilities c) An increase in unemployment shifts the economy from a point outside the production D) frontier to the frontier itself E) A reduction in unemployment shifts the entire production possibilities frontier outward. Save Started Question 12 (1 point)Explanation / Answer
An increase in productivity doesn't cause the economy to shift its production point from one point to another, instead increase in productivity shifts the entire PPF outward or decrease in Productivity shifts the PPF inward.
An increase or decrease in unemployment doesn't shift the PPF, it shifts the production point from one point to another. Unemployment means all the available resources in the economy aren't used efficiently, and therefore the economy can't reach the equilibrium and produces at a point that is inside the PPF. When unemployment declines the economy will move towards the PPF and when it increases, the economy shifts further inside it's PPF.
Answer-option A
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