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8 May, 2015 - 10:30

Any point inside the production possibilities curve is causing resources to be either unemployed or underemployed. One of the goals of economics should be to avoid such situations and to seek maximum potential production and consumption.

When the plant capacity utilization statistic reported by the Commerce Department is very low, it shows that the nation is not very efficient at utilizing its productive capacity. This indeed occurs during periods of economic slowdown: for instance, during the great depression of the 1930's.