Scenario: Tree Country has a population of 18,000 people, of whom two-thirds are part of the workforce. The country's only asset is wood, where K = 18,000. The country only produces wooden furniture. In the figure below, Y stands for GDP, and H equals efficiency units of labor.

-Refer to the scenario above.Tree Country's GDP likely will increase if ________.
A) it passes a law that requires college graduates to travel around the world for 1 year before they are allowed to start working
B) the average worker is no longer needs to obtain a college degree in order to be able to find a job
C) Tree Country gives permanent work visas to 5,000 workers from a neighboring country
D) younger generations are less proficient in furniture making but more proficient with modern technology, such as smart phones or personal computers

Question

Scenario: Tree Country has a population of 18,000 people, of whom two-thirds are part of the workforce. The country's only asset is wood, where K = 18,000. The country only produces wooden furniture. In the figure below, Y stands for GDP, and H equals efficiency units of labor.
 
-Refer to the scenario above.Tree Country's GDP likely will increase if ________.
A) it passes a law that requires college graduates to travel around the world for 1 year before they are allowed to start working 
B) the average worker is no longer needs to obtain a college degree in order to be able to find a job 
C) Tree Country gives permanent work visas to 5,000 workers from a neighboring country 
D) younger generations are less proficient in furniture making but more proficient with modern technology, such as smart phones or personal computers

Quizplus · Accepted Answer

The increase in workforce through issuing permanent work visas to 5,000 workers will increase the production of wooden furniture, which will lead to an increase in GDP. A and D are irrelevant to the production of wooden furniture and have no direct impact on GDP. B may increase employment rates but may not necessarily increase GDP as it does not address the country's production capacity.

Scenario: Tree Country Has a Population of 18,000 People, of Whom