Suppose a wave of immigration increases the number of workers in research and development without altering the labor input in production. Describe the impact on the level and growth rate of output per worker, immediately, and as time passes
What will be an ideal response?
This scenario is an increase in both the total population and in the fraction of the population engaged in research and development. One immediate impact is that an unchanged level of output is divided among a larger total workforce, so output per (total) worker is reduced. A second immediate impact is an increase in the growth rate of technology. Since the capital-labor ratio (in production of goods and services) is not immediately affected, the growth rate of output adjusts all-at-once to equal 1.43 times the higher growth rate of technology.
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An increase in aggregate demand tends to cause a ____ a short run Phillips curve at first, then cause a ____ in the short run Phillips curve as people adjust their expectations. a. Movement up along; upward shift
b. Movement up along; downward shift. c. Movement down along; upward shift. d. Movement down along; downward shift.
The quantity of money demanded __________. Consumers and firms spend ___________.
Fill in the blank(s) with the appropriate word(s).
Explain the relationship between real GDP and potential GDP and between the unemployment rate and the natural unemployment rate as the economy moves through a business cycle
What will be an ideal response?
Purchasing-power parity plays a major role in long-run exchange rate movements.
Answer the following statement true (T) or false (F)