GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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An increase in the labor force would cause the PPF to
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Shift inward
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Shift outward
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Do nothing
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Turn into a straight line
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Explanation:
Detailed explanation-1: -Answer and Explanation: An increase in the labor force will increase the resources or factor of production in the economy. It will shift the PPF curve outward, as more labor force will produce more output for the economy’s real GDP.
Detailed explanation-2: -The unemployment rate affects the PPF, as production processes require labor to produce output. Suppose the unemployment rate in the economy rises. In that case, the PPF will shift inward because the labor (one of the factors of production) will decline and lead to a reduced amount of output.
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