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a good question...

gerrandesquire
Posts: 1,258
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9/3/2010 7:18:55 AM
Posted: 6 years ago
Does massive unemployment shift the PPC leftwards?

(production Possibility curve, a curve showing the maximum production that can be done by maximum utilisation of the present resources)
wjmelements
Posts: 8,206
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9/5/2010 9:08:48 AM
Posted: 6 years ago
At 9/3/2010 7:18:55 AM, gerrandesquire wrote:
Does massive unemployment shift the PPC leftwards?

(production Possibility curve, a curve showing the maximum production that can be done by maximum utilisation of the present resources)

No. The country is just producing inside its curve.
in the blink of an eye you finally see the light
innomen
Posts: 10,052
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9/6/2010 12:57:08 PM
Posted: 6 years ago
At 9/5/2010 9:08:48 AM, wjmelements wrote:
At 9/3/2010 7:18:55 AM, gerrandesquire wrote:
Does massive unemployment shift the PPC leftwards?

(production Possibility curve, a curve showing the maximum production that can be done by maximum utilisation of the present resources)

No. The country is just producing inside its curve.

I don't think that's true. If demand is still high or higher per worker than it was previously then the productivity will be pushed further. Less people working harder to produce more per person.
gerrandesquire
Posts: 1,258
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9/7/2010 4:03:44 AM
Posted: 6 years ago

No. The country is just producing inside its curve.

I don't think that's true. If demand is still high or higher per worker than it was previously then the productivity will be pushed further. Less people working harder to produce more per person.

These two arguments were what i was confused between.

massive unemployment means less people, means less resources. The utilisation of less resources produces less, Means PPC curve shifts left, (or basically production possible decreases)

But on the other hand, unemployed people are the existing non-working force. will they have any effect on the production?