When the Population Increases with No Change in Labour Productivity

question 60

Multiple Choice

When the population increases with no change in labour productivity, employment _______ and potential GDP _______.

• A)increases; does not change
• B)increases; increases
• C)decreases; increases
• D)decreases; decreases
• E)increases; decreases

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Definitions:

Output

Output refers to the quantity of goods or services produced by a firm, industry, or economy within a certain period.

Increasing Returns

An economic principle where a proportionate increase in inputs leads to a greater proportionate increase in outputs, typically seen in production processes.

Constant Returns

A situation in production where increasing the inputs by a certain proportion results in an increase in output by the same proportion.

Input Prices

The costs associated with the purchase of the materials, labor, and other inputs required for the production of goods or services.