An Increase in the Working-Age Population Results in a

question 112

Multiple Choice

An increase in the working-age population results in a

• A) rightward shift of demand for labor curve and an increase in potential GDP.
• B) rightward shift of the demand for labor curve and no change in potential GDP.
• C) rightward shift of the supply of labor curve and an increase in potential GDP.
• D) leftward shift of the supply of labor curve and a decrease in potential GDP.

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Definitions:

Excess Capacity

A situation where a company or economy can produce more goods or services than currently demanded, leading to unused resources or capacity.

Productive Capacity

The maximum output that an economy can produce without causing inflation, determined by the availability of factors of production.

Classical Economics

A theory that emphasizes the importance of free markets, competition, and self-regulation in the economy.

Full Employment

An economic situation where all available labor resources are being used in the most efficient way possible, indicating low unemployment.