Answer to Question #133668 in Macroeconomics for Syed Hasnat Ali

Question

How each of the following events is likely to affect GDP?
a. Environmental laws prohibit the firm from emitting pollution.
b. Strikes by trade unions.
c. Discovery of new seed increases farm harvest.

Answer 1

a) GDP can decrease as the firm has to deal with exhaust purification equipment

b) GDP can decrease as the production can stop

c) GDP can increase because of an increased export capacities