An inward shift of the production possibilities curve could be caused by all of the following except
A)a war that destroys the nation's bridges,harbors and other infrastructure.
B)a plague that wipes out one fifth of the population.
C)a significant rise in the unemployment rate.
D)30 years of neglect of the nation's railroad and interstate highway systems.

Question

Quizplus · Accepted Answer

A significant rise in the unemployment rate would result in fewer resources being utilized, but it would not directly affect the nation's infrastructure or physical capital, which are the primary factors that determine the location and shape of the production possibility curve. A, B, and D, on the other hand, are all factors that would directly affect the nation's capacity to produce goods and services, which would result in an inward shift of the production possibilities curve.

An Inward Shift of the Production Possibilities Curve Could Be