how is production possibility curve affected by unemployment in the economy?explain.
due to unemployement output will be less and therefore ppc will shift backward to the left .
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A production possibility curve is a graphical representation of the various possibilities of producing two goods in an economy by combining the limited resources available, with the given technology. Unemployment in an economy, refers to any resource that is unemployed, and not put to full utilisation. If there is unemployment of resources in an economy, the economy will still have some resources that would not be fully utilised, and will thus function at a point inside the PPC. Thus, the situation will be represented by a point inside the PPC.
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A production possibility curve is a graphical representation of the various possibilities of producing two goods in an economy by combining the limited resources available, with the given technology. Unemployment in an economy, refers to any resource that is unemployed, and not put to full utilisation. If there is unemployment of resources in an economy, the economy will still have some resources that would not be fully utilised, and will thus function at a point inside the PPC. Thus, the situation will be represented by a point inside the PPC.
hope this helps you
hope this helps you
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