Figure 1.1 U.S. Production Possibilities Curve

-Refer to Figure 1.1. If the economy is located at point E,
A) the economy is operating at maximum capacity
B) economic growth has occurred in the economy
C) there must be unemployment in the economy
D) the quality of the economy's resources has deteriorated

Question

Figure 1.1 U.S. Production Possibilities Curve
 
-Refer to Figure 1.1. If the economy is located at point E,
A) the economy is operating at maximum capacity 
B) economic growth has occurred in the economy 
C) there must be unemployment in the economy 
D) the quality of the economy's resources has deteriorated

Quizplus · Accepted Answer

Point E, located inside the production possibility frontier (PPF), indicates that not all resources are being used efficiently, implying the presence of unemployment or underutilized resources in the economy.