If the Population Increases, Then Potential GDP and Employment

question 100

Multiple Choice

If the population increases, then potential GDP and employment .

• A) decreases; decreases
• B) decreases; increases
• C) increases; increases
• D) increases; decreases

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Definitions:

Investment Spending

The expenditure on capital goods including buildings, machinery, and equipment, which are used to produce goods and services in the future.

Aggregate Supply Curve

A graph that shows the relationship between the overall price level in the economy and the total output (GDP) that firms produce and sell, at all possible price levels.

Trade Restrictions

Measures imposed by governments to regulate international trade, including tariffs, quotas, and embargoes.

Natural Resources

The inputs into the production of goods and services that are provided by nature, such as land, rivers, and mineral deposits.