An increase in the demand for our exports
a. increases aggregate demand and income by the amount of the investment multiplier.
b. increases imports as well, having no impact on aggregate demand.
c. increases aggregate demand and income by less than the amount of the investment multiplier.
d. does not impact aggregate demand because this is consumption by foreign countries.
A
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One of the central predictions of neo-classical macroeconomic growth theory is that an increase in the growth rate of the population causes at first a decline the growth rate of real output per capita,
but that subsequently the growth rate returns to its natural level, itself determined by the rate of technological innovation. The intuition is that, if the growth rate of the workforce increases, then more has to be saved to provide the new workers with physical capital. However, accumulating capital takes time, so that output per capita falls in the short run. Under the assumption that population growth is exogenous, a number of regressions of the growth rate of output per capita on current and lagged population growth were performed, as reported below. (A constant was included in the regressions but is not reported. HAC standard errors are in brackets. BIC is listed at the bottom of the table). Regression of Growth Rate of Real Per-Capita GDP on Lags of Population Growth, United States, 1825-2000 (1) (2) (3) (4) (5) Lag number Dynamic multipliers Dynamic multipliers Dynamic multipliers Dynamic multipliers Dynamic multipliers 0 -0.9 (1.3) -1.1 (1.3) -1.3 (1.7) -0.2 (1.7) -2.0 (1.5) 1 3.5 (1.6) 3.2 (1.6) 1.8 (1.6) 0.8 (1.5) - 2 -1.3 (1.7) -3.0 (1.6) -2.2 (1.4) - - 3 0.2 (1.7) 1.5 (1.2) - - - 4 -2.0 (1.5) - - - - BIC -234.4 -236.1 -238.5 -240.0 -241.8 (a) Which of these models is favored by the information criterion? (b) How consistent are these estimates with the theory? Is this a fair test of the theory? Why or why not? (c) Can you think of any improved data to test the theory? What will be an ideal response?
Which is a correct statement?
a. Cyclical unemployment is also called wait unemployment because this unemployment depends on the timing of the business cycle b. Structural unemployment is unemployment resulting from changes in the structure of consumer demand or technology c. Search unemployment is the broadest unemployment category because it covers all other types of unemployment d. Frictional unemployment is the result of frictions between labor and management over how best to perform work