ECONOMICS
SCARCITY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A reduction in the country’s inflation rate
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A reduction in the country’s real interest rate
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A reduction in the size of the country’s labor force
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An increase in the typical retirement age in the country
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An increase in the country’s cyclical unemployment rate
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Detailed explanation-1: -If the country experiences more unemployment, then the unemployment rate goes up. That means the labor force is shrinking, so more people are not working and not being productive. This would decrease the output of the nation, and shift the production possibilities curve inward, or to the left.
Detailed explanation-2: -Answer and Explanation: A decline in the capital and labor that are key inputs in production will lead to a decline in production activities in the economy thus level of output will decline hence reduction in the economic growth thus leading to shifting of PPF inward.
Detailed explanation-3: -Which of the following would best explain an inward shift of the production possibilities curve? A decrease in the quality of human capital. If a certain combination of goods or services lies outside the production possibility curve of an economy, which of the following is true?
Detailed explanation-4: -An inward shift in the PPF means that the production of both goods decreases because of a change in resources or technology. Any movement along the PPF represents the economy’s choice about the relative amounts of each product to produce.
Detailed explanation-5: -Ways of causing an outward shift of a country’s production possibility frontier: Investment in capital i.e. plant and machinery and new technology. Inward migration of younger, skilled workers. Discovery of new natural resources.