Unemployment or underemployment of labor might explain why an economy would be operating inside its production possibilities curve (PPC)

A price floor represents

A) a maximum price that can be legally charged for a product or service. B) a minimum price that can be legally charged for a good or service. C) a lottery imposed upon producers by the government. D) a first come, first served mechanism for controlling prices.

Which of the following real-world phenomena does the classical model ignore?

a. Frictional unemployment b. Inflation c. Real output growth d. Cyclical unemployment e. Structural unemployment