The U.S. employment-to-population ratio peaked in 2000 and by 2016 it had fallen to 60 percent, a level not seen since the early 1980s. This fall in the employment-to-population ratio ________ the equilibrium quantity of labor and ________ potential GDP.

Question

Quizplus · Accepted Answer

The fall in the employment-to-population ratio decreases the equilibrium quantity of labor because fewer people are working relative to the population. This decrease in labor typically leads to a decrease in potential GDP, as there are fewer workers to produce goods and services.

The US Employment-To-Population Ratio Peaked in 2000 and by 2016 It