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Production in an economy is below its potential due to unephloyment. Government starts employment generation schemes. Explain its effect using production possibilities curve. or As a result of various programmes started by the government, more employment opportunities have been created. What will be its effect on production possibilities frontier? Explain.

Answer» <html><body><p></p>Solution :<a href="https://interviewquestions.tuteehub.com/tag/production-14556" style="font-weight:bold;" target="_blank" title="Click to know more about PRODUCTION">PRODUCTION</a> below the potential meansthat <a href="https://interviewquestions.tuteehub.com/tag/total-711110" style="font-weight:bold;" target="_blank" title="Click to know more about TOTAL">TOTAL</a> production in the economy is somewhere below the production possiblility curve <a href="https://interviewquestions.tuteehub.com/tag/pp-592407" style="font-weight:bold;" target="_blank" title="Click to know more about PP">PP</a>', for <a href="https://interviewquestions.tuteehub.com/tag/example-978283" style="font-weight:bold;" target="_blank" title="Click to know more about EXAMPLE">EXAMPLE</a> at point U in the diagram. <br/> <img src="https://d10lpgp6xz60nq.cloudfront.net/physics_images/SG_MIC_ECO_C01_S01_020_S01.png" width="80%"/> <br/> When government starts employment generation schemes, and since the below potential production is due to <a href="https://interviewquestions.tuteehub.com/tag/unemployment-1437065" style="font-weight:bold;" target="_blank" title="Click to know more about UNEMPLOYMENT">UNEMPLOYMENT</a>, the economy moves forward its attempt to remove unemployment and reach the potential. The movement forward is towards the PP' curve.</body></html>


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