Production in an economy is below its potential due to unemployment, government starts employment generation schemes. Explain its effect using PPC.

Production in an economy is below to its potentiality due to unemployment. Government starts employment generation schemes. Explain its effects by using production possibility curve.

Statement: A large number of engineering graduates in the country are not in a position to have gainful employment at present and the number of such engineers is likely to grow in the future. Courses of action : I. The government should launch attractive employment generation schemes and encourage these graduate to opt for such schemes to use their expertise and knowledge effectively. II. This happened due to proliferation of engineering colleges in the country and thereby lowered the quality of the engineering graduates. Those colleges which are not equipped to impart quality education should be closed down.

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