The short-run growth effect of this influx of immigrants on GDP per capita is
[ Select ]
positive
negative
zero
.

Question

The short-run growth effect of this influx of immigrants on GDP per capita is 
[ Select ]
positive
negative
zero
 .

BlackTom AI · Accepted Answer

Consider how an influx of immigrants affects an economy in the short run. 
Option 1: Positive. In the near term, more workers can produce more goods and services, increasing total output (GDP). If the capital stock remains fixed in the short run, but the labor force grows, aggregate production can rise, especially when immigrants complement existing skills or fill active labor demand. This makes a positive short-run impact on GDP per capita more plausible under many standard short-run growth frameworks. 
Option 2: Negative. A common worry is that rapid population growth dilutes capital stock, which might reduce GDP per capita if capital does not accumulate fast enough. However, in the short run, capital stock is relatively fixed, and the immediate effect of additional workers is usually not to shrink output; thus this negative scenario is less consistent with typical short-run dynamics unless there is a severe capital-labor mismatch or unemployment saturation. 
Option 3: Zero. Saying the effect is zero would imply that the gain in output is exactly offset by the population increase in per-capita terms, leaving GDP per person unchanged. In the short run, such precise balancing is unlikely because productive capacity and employment conditions typically do not adjust instantaneously to yield a net-zero per-capita change. 
Overall, given a short-run horizon and a typical assumption that more labor translates into higher aggregate production (absent immediate capital adjustment frictions), the most plausible outcome among the options is a positive effect on GDP per capita. However, it is important to note that the exact result can depend on factors like the skill mix of immigrants, the state of the capital stock, and labor market conditions.

FA25 ECON 302 002 Homework #4 (Economics of Ideas)

The short-run growth effect of this influx of immigrants on GDP per capita is [ Select ] positive negative zero .

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