If the growth rate of employment is positive but labor productivity remains unchanged, which of the following is likely to happen?
A) The per-worker production function will rotate upward.
B) Real GDP will decrease.
C) Real GDP will remain constant.
D) The per-worker production function will rotate downward.
E) Real GDP will increase.

Question

Quizplus · Accepted Answer

The positive growth rate of employment will lead to an increase in the number of workers, which will result in an increase in total output or real GDP. However, if the labor productivity remains unchanged, the increase in the number of workers will not lead to an increase in output per worker or the per-worker production function. Therefore, real GDP will increase, but the per-worker production function will remain the same.

If the Growth Rate of Employment Is Positive but Labor