How might technological spillover explain why countries with high rates of population growth don't have higher per-capita income?
What will be an ideal response?
In the Romer model, population increase causes an increase in the rate of technological progress, because there are more people engaged in research and development. Technology, however, is not easily contained within national borders, so the technology available in each economy depends not on the size of its own population but, rather on the world technological frontier. A population increase in any one economy has an imperceptible effect on the technology in use in that economy. Though technological breakthroughs always occur "somewhere," they are quickly available "everywhere," so the growth impact in the economy of origin is not much different from the impact in other economies.
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Monthly expenditures for a family of 4 in 2015 averaged $1,400. In 2016, the cost of the same purchases was $1,500. If 2015 is the base year, what was the CPI in 2016?
A) 110 B) 107 C) 100 D) 93
Everything else held constant, the interest rate on municipal bonds rises relative to the interest rate on Treasury securities when
A) income tax rates are lowered. B) income tax rates are raised. C) municipal bonds become more widely traded. D) corporate bonds become riskier.