According to Malthus, how do economic growth and population relate to each other?
Malthus wrote that population tends to grow as rapidly as means permit, driven forward by sexual desires and other influences. He said that population growth is geometric (exponential in modern terms) in nature. Unfortunately, because of the law of diminishing returns, additional labor combined with a fixed supply of land will increase output at a diminishing rate. Eventually, the marginal product of labor becomes very small, restricting an economy's ability to grow.
Since wages are based on marginal productivity, wages eventually fall to mere subsistence levels. If wages exceed the subsistence level, the population will grow and force wages down. If wages are less than the subsistence level, the population will decline due to starvation or famine, and wages will begin to rise.
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Today, the full-employment unemployment rate in the United States is generally agreed to be
a. 2 to 3 percent. b. 3 to 4 percent. c. 4 to 5 percent. d. 5 to 6 percent.
At its present rate of output, Barrel O' Biscuits, a perfectly competitive firm, finds that its marginal cost exceeds its marginal revenue and price exceeds average variable cost. To maximize profit, the firm should
a. lower the price b. raise the price c. increase output d. reduce output e. maintain its current rate of output
When a series is stationary, weakly dependent, and has serial correlation:
A. the adjusted R2 is inconsistent, while R2 is a consistent estimator of the population parameter. B. the adjusted R2 is consistent, while R2 is an inconsistent estimator of the population parameter. C. both the adjusted R2 and R2 are inconsistent estimators of the population parameter. D. both the adjusted R2 and R2 are consistent estimators of the population parameter.
The position of the long-run aggregate supply curve corresponds to the economy's:
A. full-employment real GDP. B. maximum possible level of employment. C. natural level of personal consumption expenditure. D. maximum possible level of personal consumption expenditures.