When the Population Increases with No Change in Labour Productivity

question 77

Multiple Choice

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

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

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Definitions:

Direct Cost

A direct cost is an expense that can be directly attributed to the production of specific goods or services, such as raw materials and labor.

Manufacturing

The process of converting raw materials or components into finished goods through the use of labor, machinery, tools, and chemical processing.

Breakeven Point

The point at which total costs and total revenue are equal, meaning there is no net loss or gain, and the business or investment is not making a profit but also not losing money.

Fixed Costs

Expenses that do not change with the level of production or sales over a short period, such as rent and salaries.