With no change in labor productivity, what would happen to the real wage rate and potential GDP if the population increased?
What will be an ideal response?
An increase in population increases the supply of labor. As a result, the labor supply curve shifts rightward. Neither the labor demand curve not the production function shifts. The increase in the supply of labor means that employment increases and the real wage rate falls. The economy moves along its (unchanged) production function to a higher level of potential GDP.
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The United States produces ____ of what it consumes, and consumes ____ of what it produces.
A. little; little B. little; most C. most; little D. most; most
Does it matter how much a developing country saves? Explain why or why not. Discuss theories and evidence on whether developing countries can increase the net savings rate in the economy through public policy
In particular, consider whether this can be accomplished through increased or decreased taxation of one or more types, and increased or decreased government spending of one or more types.
Suppose the price of natural gas, a typical fuel for heating homes, rises in January in Alaska. Would you expect the price elasticity of demand for natural gas to more inelastic immediately after the price increase or at some point in the future?
The theory of labor supply is based on the trade-off between __________
Fill in the blank(s) with correct word