Answer to Question #25289 in Macroeconomics for Jimmy Vo

Question

Suppose the population of the United States increases. What will happen to the demand for national defense? What will happen to the efficient quantity of defense?

Answer 1

If the population increases, the demand for national defense will increase, as more people will need to be safe. So, the efficient quantity of defense will be increased to apply to the increasing demand for national defence and to create new equilibrium between demand and supply.