An increase in the labour force while holding population constant will
A)increase aggregate demand and real GDP,but have no effect on the price level.
B)increase aggregate demand and aggregate supply by the same amounts,causing real GDP to increase and the price level to remain constant.
C)increase aggregate supply and real GDP,but have no effect on the price level.
D)increase aggregate supply and real GDP and lower the price level.

Question

Quizplus · Accepted Answer

An increase in the labor force increases aggregate supply as more workers are available for production, leading to higher real GDP. With more goods and services produced, the price level tends to decrease due to increased supply.

An Increase in the Labour Force While Holding Population Constant