Use the figure below to answer the following question.

Figure 22.3.3
-Refer to Figure 22.3.3. As a result of the rightward shift in the demand curve for labour from LD₀ to LD₁, potential GDP ________, and potential GDP per hour of labour ________.

Question

Use the figure below to answer the following question.
  
Figure 22.3.3
-Refer to Figure 22.3.3. As a result of the rightward shift in the demand curve for labour from LD₀ to LD₁, potential GDP ________, and potential GDP per hour of labour ________.

Quizplus · Accepted Answer

As the demand for labour increases, more workers are hired, leading to an increase in potential GDP. Since the increase in demand is not accompanied by an increase in the supply of labour, the potential GDP per hour of labour also increases.

Use the Figure Below to Answer the Following Question