Question

Look at the trend in the US labor force participation rate. If increasing the number of women and men in the labor force can be accomplished, what will happen to the long-run aggregate supply, and what will happen to real GDP in the long run? Can increasing immigration have this same result? Why or why not?

Answer 1

Answer:

The current labor force participation rate is around 63%, and this is the maximum possible. Hence, it cannot be increased by any means except, through immigration. And if this is made possible then you will certainly find that the supply increases, and hence the export. Thus the GDP is certainly going to be increasing. However, that looks likely only through immigration. And hence, yes increasing immigration can have a better result, and it can increase the GDP of the US quite considerably.

Explanation:

Please check the answer section.