Question

What is likely to be the impact of efforts towards reducing unemployment on the production potential of the economy explain?

Answer 1

Answer:

The efforts to reduce unemployment is going to increase  production potential in the economy.

Explanation:

When there is an increase in employment, it will lead to increased income and demand. Which is further going to increase the investment. Through the multiplier effect the increase in investment  will be more than increase in income. This increase in investment will further increase the production potential.