A key implication of the growth equation is that when the contribution of the growth of labor resources to economic growth is taken into account, a higher population growth rate ultimately:
A) must reduce economic growth.
B) must increase economic growth.
C) never has any effect on economic growth.
D) has an ambiguous effect on economic growth.

Question

Quizplus · Accepted Answer

The growth equation suggests that the effect of population growth on economic growth is ambiguous. While a larger population could increase the number of workers and consumers, it could also lead to diminishing returns and strain on resources. Therefore, it is not possible to predict with certainty whether a higher population growth rate will ultimately increase or reduce economic growth.

A Key Implication of the Growth Equation Is That When