Question

Unemployment is reduced due to the measures were taken by the government. State its economic value in the context of production possibilities frontier.

Answer 1

As the government implements various schemes to overcome the unemployment situation in an economy, there will be an increase in the employment level. So, the point which was within the production possibility curve (PPC) will become closer to PPC. This implies that the economy is operating on the PPC with better utilisation of resources and hence increased the level of output and income.