Suppose a country’s population is aging and the size of the workforce is declining. In the long run,
output will ________ and the price level will ________.
A) decrease; increase
B) remain unchanged; decrease
C) decrease; decrease
D) decrease; remain unchanged
E) increase; decrease

Question

Quizplus · Accepted Answer

With a smaller workforce, productivity will likely decrease, leading to a decrease in output. However, with a larger elderly population, their demand for goods and services may increase, leading to an increase in prices. Therefore, output will decrease and the price level will increase.

Suppose a Country’s Population Is Aging and the Size of the Workforce