A reduction in the amount of unemployment
A) moves the economyʹs point of production closer to the production possibilities frontier.
B) moves the economyʹs point of production along the production possibilities frontier.
C) moves the economyʹs point of production further away from the production possibilities frontier.
D) shifts the production possibilities frontier outward.

Question

Quizplus · Accepted Answer

A reduction in unemployment means that more resources (labor) are being utilized, moving the economy closer to its potential output, represented by the production possibilities frontier.

A Reduction in the Amount of Unemployment