Production in an economy is below its potential due to unemployment. Government starts employment generation schemes. Explain its effect using production possibilities curve. 

As initially, the production in the economy is below its potential due to unemployment, this suggests that the economy is operating at a point below the Production Possibility curve (PPC). As the government starts employment generation schemes, the unemployed resources get utilised. In a situation of full employment the economy would move to a point on the PPC.
Consider the example of the economy producing two goods- consumer goods and capital goods. Suppose AB is the Production Possibility Curve (PPC) depicting full-employment of resources.

Initially, suppose the economy is at point I (which is below the PPC) where, the economy is below the potential level. As employment in the economy rises, the economy starts moving at a point towards the PPC. At full employment, it will reach a point on the PPC such as point D.