What best explains why real GDP per person is always driven to the subsistence level in the classical model?
A) Population growth occurs, increasing the supply of labor.
B) Population growth occurs, shifting the labor supply curve leftward.
C) Growth is not possible so the demand for labor never changes.
D) Investment in capital decreases labor demand, decreasing the demand for labor.
A
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Utility is:
a. easily measured, because all people derive the same utility from consumption. b. easily measured, because it is an objective concept. c. easily measured, because it is a subjective concept. d. hard to measure, because it is a subjective concept. e. hard to measure, because it is an objective concept.
A worker will become indifferent between spending the next hour on work or leisure if the benefit of another hour of work is:
A. greater than the opportunity cost. B. exactly equal to the opportunity cost. C. less than the opportunity cost. D. constant for each additional hour worked.