Suppose an economy experiences an increase in unemployment across all industries. What is the result of this increase in unemployment on the production possibilities curve?

• The slope of the production possibilities curve would decrease because an increase in unemployment would decrease the maximum level of production.

• The curve would shift outward because labor is considered a factor of production. By increasing productive resources, the maximum level of production will increase.

• The curve would shift inward because labor is considered a factor of production. By reducing productive resources, the maximum level of production will decrease.

• The level of unemployment has no effect on the production possibilities curve, so there would be no change to the production possibilitie