One important reason why the Solow residual may be strongly procyclical even if the actual technology used in production doesn't change is that
A) employment is procyclical.
B) resource utilization is procyclical.
C) demand shocks are the dominant force determining the business cycle.
D) the coefficients (a and 1 - a) on capital and labor in the production function are procyclical.
B
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The federal government budget has generally been in a deficit for the past several decades because
A) budget deficits promote full employment. B) every year during those decades was a recession year in which expansionary fiscal policy was called for. C) military expenditures were increased steadily throughout those decades. D) political pressure on Congress to increase taxes and to balance the budget were less effective than political pressure to increase expenditures.
If there were a decreased fraction of divorced couples and an increase in the proportion of two-income families: a. both would tend to increase measured income inequality
b. both would tend to decrease measured income inequality. c. the decreased fraction of divorced couples would tend to increase measured income inequality, but the increase in the proportion of two-income families would tend to decrease measured income inequality. d. the decreased fraction of divorced couples would tend to decrease measured income inequality, but the increase in the proportion of two-income families would tend to increase measured income inequality.