Japan's population increased by 3 percent in 2007. As a result, which of the following occurred?
i. an increase in potential GDP
ii. a rightward shift in the long- run aggregate supply curve
iii. a rightward shift in the short- run aggregate supply curve.
A) i and ii only
B) i, ii and iii
C) ii and iii
D) iii only

Question

Quizplus · Accepted Answer

An increase in population can lead to an increase in potential GDP due to a larger labor force. This can also cause a rightward shift in both the long-run and short-run aggregate supply curves as more resources become available for production.

Japan's Population Increased by 3 Percent in 2007