Suppose the growth rate of employment is positive but labor productivity remains unchanged.What will happen to real GDP?
A)it will either decrease or remain constant
B)it will decrease
C)it will remain constant
D)it will either increase or remain constant
E)it will increase

Question

Quizplus · Accepted Answer

Real GDP will increase as employment growth will lead to an increase in the number of people contributing to production. This will lead to an increase in the output of goods and services, and hence an increase in real GDP. The fact that labor productivity remains unchanged does not undermine this effect.

Suppose the Growth Rate of Employment Is Positive but Labor